TC Energy Close to Selling Gas Pipeline Stake to Indigenous Groups

Provincial government agency Alberta Indigenous Opportunities Corporation (AIOC) has given its “contingent approval” on a loan guarantee to an indigenous consortium to buy a stake in TC Energy’s NGTL natural gas network system in Canada, with a deal expected to be announced next week, Bloomberg News reports, citing a TC Energy letter it has seen. 

The agency has approved a loan guarantee of US$725 million (C$1 billion) to the consortium representing indigenous groups in Alberta, British Columbia, and Saskatchewan.  

The NGTL System, spanning 24,386 kilometers (15,153 miles) in length, is TC Energy’s natural gas gathering and transportation system for the Western Canadian Sedimentary Basin (WCSB), connecting most of the natural gas production in western Canada to domestic and export markets.

In January this year, TC Energy signaled it would begin talks to sell a stake in the natural gas pipeline network to indigenous groups.

“Potential ownership in our projects and assets means that Indigenous communities can share in Canada’s resource economy,” TC told Bloomberg in an emailed statement at the time.

Last year, TC Energy agreed to sell 40% of the Columbia Gas and Columbia Gulf pipelines in the U.S. for US$3.9 billion (C$5.2 billion) in cash.  

The company has been seeking to monetize assets via divestitures to reduce debt and pay for the cost overruns at other pipeline projects, including in British Columbia in Canada, where higher costs plagued the Coastal GasLink pipeline project, which would supply Canada’s first major LNG export plant.

“To date, we have advanced our deleveraging goals by delivering on our $5+ billion asset divestiture program ahead of our year-end target, while maximizing the value of our assets and safely executing major projects, such as Coastal GasLink and Southeast Gateway,” TC Energy’s president and CEO   François Poirier said in July 2023.

Canada’s Indigenous community has recently hailed a major milestone in the natural gas industry as the Haisla Nation and Pembina Pipeline Corporation decided last month to move ahead with the Cedar LNG project, a floating LNG export facility on Canada’s West Coast, and the world’s first indigenous majority-owned LNG project.

By Tsvetana Paraskova for Oilprice.com

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