TC Energy Corp. (TRP, +0.30% TRP, +0.64%) has announced that it will be selling a 40% interest in its Columbia Gas Transmission LLC and Columbia Gulf Transmission LLC to private equity firm Global Infrastructure Partners (GIP) for C$5.2 billion ($3.9 billion) in cash.
The agreement allows TC Energy to retain operation of the pipelines, while both TC Energy and GIP will jointly invest in annual maintenance, modernization, and provide growth capital to enhance the system’s capacity. In addition, GIP will fund 40% of the gross capital spending of over C$1.3 billion each year for the next three years.
François Poirier, CEO of TC Energy, expressed the company’s commitment to reducing debt and funding its capital program. The joint venture with GIP presents an opportunity to leverage the combined assets and capabilities of both companies in meeting the growing market demands for cleaner fuels, energy security, and energy affordability.
Bayo Ogunlesi, CEO of GIP, also expressed enthusiasm for the joint venture and its potential to serve market needs.
The Columbia Gas and Columbia Gulf pipelines are crucial facilitators of natural gas product transportation across the vast expanse of North America, totaling over 15,000 miles. As of now, TC Energy’s stock has experienced a minor increase in premarket trades on Monday. However, considering trades made prior to this announcement, the stock is down by 0.8% in 2023.
