TC energy sells 40% stake in two pipelines

Canada’s TC Energy will sell a 40% interest in its Columbia Gas and Columbia Gulf pipeline systems to U.S.-based Global Infrastructure Partners (GIP)

The pipelines will be held in a new joint venture partnership with GIP. Total proceeds for the transaction are expected to be US$3.9 billion in cash, to be paid at closing, subject to certain customary adjustments.

The Columbia Gas and Columbia Gulf pipelines span more than 15,000 miles across a highly integrated North American natural gas network. These assets deliver a substantial portion of daily U.S. natural gas demand, including approximately 20% of U.S. liquified natural gas (LNG) export supply. The companies said the resiliency of these systems combined with their ability to connect the largest and lowest-cost natural gas basin to key demand centers and global export markets uniquely positions them to remain a central player in further supporting the transition to lower-emitting energy sources.

 TC Energy will continue to operate the systems, focusing on maximizing value through safe operations, reliability of service and operational excellence. TC Energy and GIP will jointly invest in annual maintenance, modernization and sanctioned growth capital to further enhance system capacity and reliability. GIP will fund its 40% share of gross capital expenditures, which are expected to average more than US$1 billion annually over the next three years.

“Long-term fundamentals continue to underscore the role of natural gas in a sustainable energy future,” said François Poirier, TC Energy’s President and CEO. “Our partnership with GIP will provide additional investment capacity to originate and execute Columbia Gas and Columbia Gulf projects to meet that need.

“This, and future partnerships, across our portfolio will strengthen our ability to enable the energy transition while enhancing balance sheet strength,” Poirier said. “We look forward to combining the collective strengths of TC Energy’s strategic asset base and strong operating expertise, as well as GIP’s proven investment track record and extensive relationships in the global LNG market.”

The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions.