TC Energy Corporation (TRP) and its partner, Northern New England Investment Company, Inc., a subsidiary of Énergir L.P., have reached an agreement to sell the Portland Natural Gas Transmission System (PNGTS) to BlackRock and investment funds managed by Morgan Stanley Infrastructure Partners. The gross purchase price stands at US$1.14 billion, inclusive of assuming US$250 million in outstanding senior notes held at PNGTS. This transaction reflects a valuation of approximately 11.0 times the reported 2023 comparable EBITDA.
François Poirier, president and CEO of TC Energy, commented, “Today’s announcement represents continued progress towards achieving our 2024 strategic priority of enhancing our balance sheet strength by delivering approximately $3 billion in asset divestitures.” He added, “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 cash proceeds will be distributed according to the current PNGTS ownership interests (TC Energy 61.7 percent, Énergir 38.3 percent) and paid at closing, subject to customary adjustments. The buyer will also assume the outstanding senior notes held at PNGTS, currently consolidated on TC Energy’s balance sheet. The transaction is anticipated to close in mid-2024, subject to regulatory approvals and customary closing conditions.
PNGTS, a 475-kilometre (295-mile) FERC-regulated transporter of natural gas, serves the upper New England and Atlantic Canada markets. The pipeline receives natural gas from the Trans Quebec and Maritimes (TQM) Pipeline via the Canadian Mainline. TC Energy will provide customary transition services and collaborate with the buyer to ensure the safe and orderly transition of this critical natural gas system.
TC Energy’s focus for 2024 remains steadfast, aiming to maximise asset value through safety and operational excellence, deliver its secured capital programme on time and on budget, and bolster balance sheet strength and financial flexibility through asset divestitures and business streamlining efforts. The company’s 2024 financial guidance and growth outlook through 2026 remain unchanged following this announcement.
Barclays served as the exclusive financial advisor to TC Energy and Énergir on the transaction, while Bracewell LLP acted as the legal advisor to TC Energy.
For more information visit www.tcenergy.com
