TC Energy moves forward with a deal to sell a stake in its pipeline system to Indigenous groups, backed by Alberta's government
TC Energy Corp. is close to finalizing a deal to sell a stake in its natural gas pipeline system to Indigenous communities in Western Canada, with the support of Alberta's government, reports BNN Bloomberg.
A provincial government agency has given “contingent approval” for a $1bn loan guarantee, enabling the Indigenous consortium to finance the purchase.
According to a letter from TC Energy seen by Bloomberg News, the buying group includes Indigenous communities from Alberta, British Columbia, and Saskatchewan.
TC Energy, based in Calgary, plans to announce the transaction on July 30, with closing expected in late August. However, there are still legal, financial, and regulatory details to be resolved.
The NGTL System, which gathers and transports natural gas in Canada’s western provinces for domestic and export markets, spans 24,386 kilometres (15,153 miles) between Alberta and British Columbia.
This sale is part of TC Energy’s efforts to reduce debt after facing significant cost overruns on the Coastal GasLink pipeline project, which was built to supply Canada’s first major liquefied natural gas plant.
Last year, TC Energy exceeded its $5bn divestiture target by selling a 40 percent equity interest in the Columbia Gas Transmission and Columbia Gulf Transmission networks in the US.
In June, TC Energy announced plans to divest another $3bn of assets in the near future.
“We want to create mutually beneficial partnerships with Indigenous communities. Potential ownership in our projects and assets means that Indigenous communities can share in Canada’s resource economy,” a spokesperson for TC Energy said by email, though they did not confirm the NGTL deal.
A spokesperson for the Alberta Indigenous Opportunities Corp., the government agency involved in the transaction, also declined to comment.
Last year, TC Energy sought approval from the Canada Energy Regulator to transfer ownership of the NGTL system to facilitate potential future minority ownership by Indigenous groups.
