today announced that its Board of Directors has sanctioned the Cardinal expansion project ("Cardinal" or the "Project"), a fully integrated brownfield expansion of the Company's existing Cardinal system in west-central Alberta. The Project will add 640,000 barrels per day of firm takeaway capacity, with a total sanctioned capital cost of approximately $640 million and first incremental volumes targeted for the second half of 2027.
The scope of Cardinal includes the addition of a 42-inch, 118-kilometre trunkline segment between the Company's Willow Lake terminal and its existing Cardinal Junction facility, two new 250,000-barrel storage tanks, and associated pump and metering upgrades. Approximately 85% of expected throughput is underpinned by 10-year take-or-pay contracts with investment-grade counterparties, and the Company has secured all material regulatory approvals required to commence construction.
"Cardinal is the highest-return organic project in our development inventory and reflects the durable demand our shippers have signalled for reliable Alberta takeaway," said Elena Vasquez, President and Chief Executive Officer of Quorant. "With 85% of capacity contracted under long-term take-or-pay arrangements and construction commencing in the fourth quarter, we expect Cardinal to be immediately accretive to distributable cash flow upon commissioning."
The Company expects to fund the Project through a combination of cash on hand, its existing $1.2 billion committed revolving credit facility, and internally generated cash flow. Quorant has reaffirmed its previously disclosed 2026 capital expenditure guidance of $310 million and expects total 2027 capital expenditures to be in the range of $475 million to $525 million, inclusive of Cardinal construction spend.
Cardinal is expected to generate approximately $128 million of run-rate Adjusted EBITDA once fully commissioned and ramped, representing an unlevered build multiple of approximately 5.0 times. The Company continues to target a long-term consolidated Debt-to-Adjusted-EBITDA ratio of 3.5 times or lower and expects to remain within that target throughout the construction period.