The pipeline transported first gas in May last year. Credit: Arulonline from Pixabay.

Canadian firm TransAlta, along with its partner Tidewater Midstream, has signed a letter of intent (LoI) to sell the Pioneer pipeline to TC Energy’s wholly owned subsidiary NOVA Gas Transmission (NGTL).

The deal has a value of C$255m ($184.6m).

The 131km Pioneer pipeline in Alberta, Canada, connects Tidewater’s Brazeau River Complex (BRC) gas plant to TransAlta’s generating units at Keephills and Sundance. It transported first gas in May.

NGTL intends to integrate the Pioneer pipeline into its natural gas infrastructure in Alberta.

TransAlta president and CEO Dawn Farrell said: “Tidewater has been an exceptional partner that was able to build the Pioneer pipeline well ahead of schedule, allowing us to significantly reduce our carbon emissions and costs.

“Going forward, we are excited to work with TC Energy to meet our transportation requirements as we continue to execute our clean energy strategy, which will support our goals as a leader in clean electricity generation.”

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The transaction will enable TransAlta to access NGTL’s liquid natural gas (LNG) network and gas trading hub. It also provides the company with access to a diversified group of gas producers and resource basins.

As part of the deal, TransAlta will sign long-term delivery transportation agreements with NGTL to bring its existing natural gas pipeline transportation service to 400TJ per day by 2023.

The closure of the deal requires the signing of a purchase and sale agreement (PSA) and the relevant regulatory approvals.

In December 2016, Tidewater Midstream acquired the remaining 37% working interest (WI) in the BRC gas plant and the remaining 60% WI in gas gathering pipelines directly connected to the BRC.