TransCanada Corp. offered to sell its remaining 30% interest in Gas Transmission Northwest LLC (GTN) to its MLP, TC PipeLines, LP.
"This transaction, along with the recent sale of our remaining 30% interest in the Bison Pipeline, further demonstrates our commitment to drop down all of our remaining U.S. natural gas pipeline assets to the partnership on a more sizable and frequent basis," said Russ Girling, TransCanada's president and CEO. "Asset sales to the partnership will provide us with significant cash proceeds to help fund our unprecedented $46 billion of commercially secured projects. This growth portfolio now includes $2.7 billion of new NGTL System expansions and $475 million in pipeline and facility investments within the Eastern Triangle portion of the Canadian Mainline, which were announced on Nov. 4."
GTN is a 1,353-mile pipeline that transports natural gas under long-term contracts from the Western Canada Sedimentary Basin and the Rocky Mountains to Washington, Oregon and California. Through the first nine months of 2014, the remaining 30% interest in GTN generated comparable EBITDA of $32 million.
TransCanada's Board of Directors has approved the sale of GTN and, subject to the satisfactory negotiation of terms and partnership Board approval, the transaction is expected to close by the end of first quarter 2015.
In addition to GTN, TransCanada ultimately expects to drop down its remaining interest in the following U.S. gas pipelines to the Partnership:
· 44.5% and 61.7% interest in Iroquois and Portland, respectively; and
· 100% and 53.6% interest in ANR and Great Lakes, respectively.
These assets are expected to generate approximately $450 million of EBITDA in 2016 and beyond.
TransCanada management believes the partnership has the capacity to complete drop downs in excess of US$1 billion per year going forward. Beyond the sale of GTN, future drop downs will be subject to TransCanada and partnership board approvals as well as market conditions.
TransCanada, through its subsidiaries, currently holds a 28% interest in TC PipeLines, LP, which was formed to acquire, own and actively participate in the management of U.S. gas pipelines and related assets.
Recommended Reading
Iraq to Seek Bids for Oil, Gas Contracts April 27
2024-04-18 - Iraq will auction 30 new oil and gas projects in two licensing rounds distributed across the country.
US Raises Crude Production Growth Forecast for 2024
2024-03-12 - U.S. crude oil production will rise by 260,000 bbl/d to 13.19 MMbbl/d this year, the EIA said in its Short-Term Energy Outlook.
Petrobras to Step Up Exploration with $7.5B in Capex, CEO Says
2024-03-26 - Petrobras CEO Jean Paul Prates said the company is considering exploration opportunities from the Equatorial margin of South America to West Africa.
Exxon Versus Chevron: The Fight for Hess’ 30% Guyana Interest
2024-03-04 - Chevron's plan to buy Hess Corp. and assume a 30% foothold in Guyana has been complicated by Exxon Mobil and CNOOC's claims that they have the right of first refusal for the interest.
The OGInterview: How do Woodside's Growth Projects Fit into its Portfolio?
2024-04-01 - Woodside Energy CEO Meg O'Neill discusses the company's current growth projects across the globe and the impact they will have on the company's future with Hart Energy's Pietro Pitts.