LNG

Canada must mobilise $500 billion in energy infrastructure by 2030 to capture a “generational, time-bound opportunity” in global LNG exports – or lose out to rival US developers, said TC Energy CEO François Poirier.

TC Energy, the leading North American natural gas pipelines operator, is moving to complete final works surrounding the link to the LNG Canada project in British Columbia while selling a pipeline gas connection to a First Nation-run venture amid an increase in US natural gas flows.

TC Energy Corp., the North American pipelines company and supplier of LNG feed gas, said a transaction had been agreed to sell Portland Natural Gas Transmission System (PNGTS) for US$1.14 billion including debts to funds of BlackRock and Morgan Stanley Infrastructure Partners.

TC Energy has a partner in the PNGTS asset called Northern New England Investment Company, which is a subsidiary of Énergir L.P.

The sale to BlackRock, through a fund managed by its infrastructure business, and investment funds managed by Morgan Stanley Infrastructure, is for a gross price of US$1.14Bln, which includes the assumption of US$250 million of outstanding senior notes held at PNGTS.

PNGTS is a 475-kilometres (295-mile) FERC-regulated transporter of natural gas serving the upper New England and Atlantic Canada markets.

Natural gas flows

The pipeline receives natural gas from the Trans-Quebec and Maritimes (TQM) Pipeline via the Canadian Mainline.

TC Energy said it would provide customary transition services and would work jointly with the buyers to ensure the safe and orderly transition of “this critical natural gas system”.

The Calgary, Alberta-based company’s other key assets include the completed Coastal GasLink in British Columbia to supply feed gas to the LNG Canada project which advancing commissioning activities.

The PNGTS transaction implies a valuation of approximately 11.0 times reported 2023 comparable EBITDA.

“This announcement represents continued progress toward achieving our 2024 strategic priority of enhancing our balance sheet strength by delivering approximately $3 billion in asset divestitures,” said François Poirier, TC Energy’s President and Chief Executive.

“We are committed to reaching our 4.75 times debt-to-EBITDA upper limit by year-end and expect to have further asset divestiture announcements through the year,” Poirier added.

Asset sales

“This sale of a non-core asset at a strong valuation is a unique opportunity to support our capital rotation and deleveraging priorities while continuing to meet the needs of the communities PNGTS serves,” the CEO said.

TC Energy added that cash proceeds from the deal would be split pro-rata according to the current PNGTS ownership interests of TC Energy 61.7 percent and Énergir 38.3 percent and will be paid at closing subject to customary adjustments.

“As part of the transaction, the buyers will assume the outstanding senior notes held at PNGTS and currently consolidated on TC Energy’s balance sheet,” said TC Energy.

“The transaction is expected to close in mid-2024, subject to the receipt of regulatory approvals and customary closing conditions,” it added.

TC Energy, the North American natural gas pipelines operator, reported record results with rising earnings from US and Mexican pipelines amid the completion of the Coastal GasLink to LNG Canada in the province of British Columbia.

TC Energy Corp., whose current ventures include the building of pipelines in the US, Mexico and Canada, said it had made “monumental progress” on the Coastal GasLink in British Columbia linking gas fields to the Shell-led LNG Canada venture and had achieved mechanical completion ahead of the year-end target.

The update came in its earnings as TC Energy reported a quarterly net loss of C$197 million (US$143M) versus a C$841M (US$612M) net profit in the same three months of 2022.

This was largely due to the after-tax impairment charge of C$1.18Bln (US$858M) for the three months to the ended of September 2023 related to TC Energy's equity investment in Coastal GasLink Pipeline partnership project company.

Calgary, Alberta-based TC Energy reported that net income for the nine months from January to September because of the impairment had dropped to C$1.36Bln from C$2.08Bln in the previous year.

“The team’s exceptional safety and construction execution on this challenging project means that we have reached 100 percent pipeline installation, including the successful hydrotesting of the full 670km (Coastal GasLink) pipeline length,” said François Poirier, TC Energy’s President and Chief Executive.

On track

“The project remains on track with the approximately C$14.5Bln cost estimate,” added Poirier.

TC Energy’s five divisions include Canadian Natural Gas Pipelines, US Natural Gas Pipeline, Mexican Natural gas Pipeline, Liquids Pipeline and Energy and Power Solutions.

“We are also delivering on our 2023 strategic priorities, including strengthening the balance sheet with the recent receipt of C$5.3Bln of asset sale proceeds that will be utilized for debt repayment and funding, along with maximizing the value of our assets with the announced intention to spin-off our Liquids Pipelines business,” the CEO explained.

At the start of October 2023 TC Energy completed the sale of 40 percent stakes for a total of C$5.3 billion (US$3.9Bln) in two US assets, Columbia Gas Transmission and Columbia Gulf Transmission, transporters of 20 percent of US LNG feed-gas volumes.

The Calgary, Alberta-based company confirmed that the Columbia Gas and Columbia Gulf stakes was completed to the buyer, the New York-headquartered asset management firm Global Infrastructure Partners (GIP).

US natural gas

The Canadian company described GIP as a “strong and reputable strategic and financial partner” that would help it unlock incremental value on the Columbia gas systems.

The Columbia Gas and Columbia Gulf pipelines span more than 15,000 miles across the North American natural gas network and are underpinned by strong long-term natural gas supplies and a rate-regulated commercial framework.

The company noted in its earnings highlights that quarterly US Gas Pipeline net profits rose to C$782M from C$714M and in the nine months to C$2.57Bln from C$1.73Bln because of US LNG feed-gas deliveries.

TC Energy said that US Natural Gas Pipelines LNG deliveries in the third quarter averaged 3.1 billion cubic feet per day, an increase from the third quarter of 2022.

The US Pipelines division also achieved a new record of deliveries to power generators of 5.2 Bcf on July 28, 2023.

TC Energy said that it delivered approximately 7 percent comparable gross earnings (EBITDA) growth of C$2.6Bln in the third quarter compared with $2.5Bn in the same three months of 2022.

Canada and Mexico

Nova Gas Transmission Ltd. (NGTL), TC Energy’s natural gas gathering and transportation system for the Western Canadian Sedimentary Basin connecting most of the natural gas production in western Canada to domestic and export markets, saw receipts average 14.0 Bcf per day, up 0.5 Bcf/d from the third quarter 2022.

NGTL System daily receipts reached 14.6 Bcf on August 6, 2023, the highest single day average on the pipeline.

TC Energy was also making progress together with Mexico’s Federal Electricity Commission (CFE) on the Southeast Gateway Project.

This consists of the construction of a marine pipeline that will transport natural gas, connecting the supply from Tuxpan, Veracruz, to delivery points in Coatzacoalcos, Veracruz and in Paraíso in Tabasco state.

“The Southeast Gateway Pipeline project continues to progress with its US$4.5Bln cost estimate and schedule,” said the company.

“Land rights and rights of way negotiations have closed and all critical permits for onshore construction have been received. We are advancing construction of onshore facilities and landfalls,” said the company.

“Offshore engineering is complete and offshore installation expected to commence prior to the end of 2023,” it added

In other Mexican projects, TC Energy placed the lateral section of the Villa de Reyes (VdR) pipeline into commercial service.

TC Energy also successfully completed two open seasons on Marketlink, supporting the sustained demand for Canadian crude on the Keystone Pipeline and Marketlink systems.

TC Energy Corp., whose current projects include the building of the Coastal GasLink pipeline for LNG Canada, has completed the sale of 40 percent stakes for a total of C$5.3 billion (US$3.9Bln) in two US assets, Columbia Gas Transmission and Columbia Gulf Transmission, transporters of 20 percent of US LNG feed-gas volumes.

TC Energy, the North American pipeline company and key supplier of feed gas for the liquefied natural gas industry, plans to split up by spinning off its oil pipeline business and focusing on transporting natural gas.

TC Energy Corp., whose main current project is the building of the Coastal GasLink pipeline for the LNG Canada venture, has agreed to sell 40 percent stakes for C$5.2 billion (US$3.9Bln) in the two US assets, Columbia Gas Transmission and Columbia Gulf Transmission, the transporters of substantial US LNG feed-gas volumes.

TC Energy, the North American natural gas and energy pipelines company constructing pipeline links from British Columbia's shale basin to LNG projects on the coast, reported a surge in net income of more than three-fold as projects progressed from Canada to Mexico.

TC Energy Corp., the Canadian natural gas pipeline company, reported strong four-quarter results from US and Mexican activities, though posted a huge quarterly impairment charge related to the rising costs of the Coastal GasLink pipeline for LNG Canada and this meant a quarterly loss.