Natural gas company TC Energy, in partnership with Northern New England Investment Company, has finalised the sale of the PNGTS.
The transaction, announced in March 2024 and valued at $1.14bn, includes $250m of outstanding senior notes assumed by the purchasers.
It aligns with TC Energy’s objective to divest at least C$3bn in assets in 2024 to reduce its debt.
The cash proceeds from the sale will be distributed in accordance with the ownership shares held in the PNGTS before the sale.
TC Energy had a 61.7% interest in the system, while Northern New England Investment Company, a unit of Énergir, owned the remaining 38.3%.
TC Energy’s pre-tax cash equity proceeds are estimated at approximately $545m.
As per the initial announcement, the PNGTS was acquired by a BlackRock-managed fund within its diversified infrastructure business and investment funds managed by Morgan Stanley Infrastructure Partners.
PNGTS is a 475km natural gas transporter that serves markets in upper New England and Atlantic Canada and connects to the Trans Quebec and Maritimes Pipeline via the Canadian Mainline.
Post-acquisition, it will operate independently and continue to provide natural gas transportation services to its varied customer base.
Industry veteran Bill Yardley will take over as chief executive officer of PNGTS with immediate effect.
TC Energy president and CEO François Poirier said: “Completing this transaction demonstrates continued progress towards delivering on C$3bn in asset divestitures and enhancing our balance sheet strength. We remain focused on reaching our 4.75 times debt-to-EBITDA [earnings before interest, taxes, depreciation and amortization] upper limit by year-end, and today’s announcement takes us one step closer to achieving this goal.”
Earlier this year, TC Energy also signed a binding letter agreement to sell its Prince Rupert Gas Transmission entities to Western LNG and Nisga’a Nation.
Furthermore, last month, the company agreed to sell a 5.34% interest in its Canadian gas assets to indigenous communities for $738m.
