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TC Energy announces partial monetisation of Northern Courier Pipeline

Published by , Editorial Assistant
World Pipelines,

TC Energy Corporation (TC Energy) has announced that it has entered into an agreement to sell an 85% equity interest in Northern Courier Pipeline to Alberta Investment Management Corporation (AIMCo). In conjunction with the sale, TC Energy also expects that Northern Courier Pipeline will undertake a financing of long-term, non-recourse debt, the proceeds of which are expected to be fully distributed to TC Energy.

Both transactions are expected to close in the third quarter of 2019, with the equity sale contingent on the debt financing and subject to closing adjustments along with customary regulatory approvals. The 90 km (56 mile) pipeline system transports bitumen and diluent between the Fort Hills mine site and Suncor Energy’s terminal located north of Fort McMurray, Alberta. The resulting aggregate gross proceeds to TC Energy are projected to be approximately CAN$1.15 billion.

“The monetisation of Northern Courier advances our ongoing efforts to prudently fund our industry-leading capital programme while maximising value for our shareholders,” said Russ Girling, TC Energy President and Chief Executive Officer. “Along with the sale of Coolidge, which recently closed, we now expect to realise approximately CAN$1.75 billion of proceeds from announced portfolio management activities in 2019. When combined with our significant and growing cash flow, access to capital markets and potential additional portfolio management, we believe we are well-positioned to fund our CAN$30 billion secured capital programme in a manner consistent with achieving targeted leverage metrics in 2019 and thereafter,” added Girling.

Following the closing of the transactions, TC Energy will hold a 15% aggregate interest in Northern Courier Pipeline and will account for the asset under the equity method in the company’s consolidated financial statements. TC Energy will remain the operator of the pipeline.

“We look forward to working with AIMCo as we realise the benefits of this partnership and financing opportunity,” concluded Girling.

RBC Capital Markets is acting as exclusive financial advisor to TC Energy and as Sole Bookrunner and Global Lead Agent on the debt issuance.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction. The securities mentioned herein have not been and will not be qualified by prospectus in Canada or registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold absent registration or an exemption therefrom.

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