TC Energy sells 40% stake in Columbia Gas Transmission pipelines to GIP for $4 B

(Reuters) — Canada's TC Energy, best known for its Keystone oil pipeline, will divest a 40% interest in its Columbia Gas Transmission and Columbia Gulf Transmission pipelines for C$5.2 billion ($3.95 billion) to Global Infrastructure Partners (GIP).

The Calgary, Alberta-based company has said it aimed to sell assets this year to reduce debt and fund other projects such as the Coastal GasLink pipeline in British Columbia, which is grappling with major cost overruns.

TC was on course to deliver on its target to divest C$5 B of assets by the end of the year, CEO François Poirier said in April.

Columbia Gas and Columbia Gulf will be held in a new joint venture partnership and TC will remain the operator under the deal, which is expected to close in the fourth quarter.

TC and GIP will jointly invest in annual maintenance and modernization of the transmission systems, the company said, with GIP funding 40% share of gross capital expenditures, which are expected to average more than C$1.3 B annually over the next three years.

The pipelines span more than 15,000 miles and deliver a substantial portion of daily U.S. natural gas demand, including about 20% of U.S. LNG export supply, according to TC Energy.

GIP currently manages $100 B in assets, as per its website. Last month, the firm partnered with TotalEnergies and NextDecade to become a majority investor in Phase 1 of Rio Grande LNG Project.

U.S.-listed shares of TC were down 1.3% in premarket trading at $39.

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