Canadian energy infrastructure company TC Energy has agreed to sell 40% of its Columbia Gas and Columbia Gulf pipelines.
Global Infrastructure Partners (GIP) will purchase the 40% equity in the two pipelines for a cash sum of C$5.2bn ($3.9bn) upon the expected deal's close, by November.
Following the purchase, GIP will pay 40% of annual maintenance, modernisation and growth capital, worth C$1.3bn of investment per year until 2026. The sale of the stake will make the ownership of the two pipelines a joint venture project, although TC Energy will continue to operate them.
The partial divestment from the two pipelines is the culmination of TC Energy’s stated plan from November 2022 of divesting to raise money and reduce debt. The 40% pipeline stake sale will allow TC Energy to invest in other projects such as the beleaguered Coastal GasLink pipeline.
“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 liquified natural gas (LNG) market,” said François Poirier, TC Energy’s president and CEO.
The Columbia Gas and Columbia Gulf pipelines span more than 24,000 miles combined across the US, carrying an estimated 20% of US LNG export supply. The 18,815km Columbia Gas pipeline is the fourth-longest pipeline in the US, with a capacity of 9.99 billion standard cubic feet per day.
TC Energy has made a number of efforts to expand its LNG portfolio in 2023. In May, the company received assent from the US Federal Energy Regulatory Commission to expand the North Baja natural gas pipeline. The expansion is expected to cost $127m. The 495 million cubic feet per day expansion project will supply gas to the prospective Costa Azul LNG liquefaction export plant in Mexico.
