3 Min Read
CALGARY, Alberta (Reuters) - TransCanada Corp (TRP.TO) (TRP.N) has offered to sell stakes in two U.S. natural gas pipelines to fund other projects including its recently purchased Columbia natural gas network, the Calgary-based company said on Monday.
The move comes after TransCanada, Canada's No. 2 pipeline operator, sold other assets and offered new shares late last year to help fund its $10.3-billion acquisition of the Columbia Pipeline Group, a deal that eased concerns over its outlook, which had been hindered by challenges on crude pipelines.
TransCanada said it would sell its 49.3 percent stake in the Iroquois system and its remaining 11.8 percent stake in the Portland system, both serving the U.S. Northeast, to TC PipeLines LP (TCP.N), a partnership in which it holds a 27-percent stake.
Financial terms were not disclosed, but a 25.9 percent stake in Iroquois system sold for $286.5 million in 2015, and TransCanada last year sold a 49.9 percent stake in the Portland pipeline to TC PipeLines for $223 million.
"This offer demonstrates the meaningful role that TC PipeLines, LP can fulfill in funding a portion of our C$23 billion near-term capital program," TransCanada Chief Executive Russ Girling said in a statement.
According to TransCanada, its near-term projects also include the Nova Gas Transmission Ltd and Canadian Mainline natural gas systems, minor crude pipelines and power generation projects in Canada and gas pipelines in Mexico.
TransCanada's outlook has been clouded by regulatory challenges to two proposed pipelines projects from Canada's oil heartland of Alberta, Energy East to the East Coast and Keystone XL to the Gulf.
While the United States under President Donald Trump has been favorable toward Keystone XL, analysts have said it was unclear how quickly the pipeline could go ahead if approved.
TC PipeLines said the offer was subject to approval by its board of directors.
The Iroquois pipeline extends from the TransCanada Mainline system at the U.S. border near New York to markets in the U.S. Northeast. The Portland pipeline connects with the TransQuebec and Maritimes pipelines at the Canadian border and the Tennessee gas system near Boston.
Reporting by Ethan Lou in Calgary, Alberta, and John Benny in Bengaluru; Editing by Savio D'Souza and Cynthia Osterman