CALGARY, Alberta (Reuters) - Russ Girling, a veteran of TransCanada Corp’s decade-plus overhaul, will take over as chief executive after current CEO Hal Kvisle retires at the start of July, the country’s largest pipeline operator said on Thursday.
Girling, 47, has held several finance and operating posts since joining TransCanada in 1994, and now as chief operating officer is overseeing its expansion into a major transporter of Canadian oil sands crude.
He was seen as the logical choice to succeed Kvisle, who is retiring after 11 years with the C$26 billion ($26 billion) pipeline and power generation company, the last nine as CEO.
Girling and Kvisle, 57, worked together on such major initiatives as expanding the company’s portfolio of U.S. gas pipelines and power generating assets as gas flows on its best-known holding -- the Canadian mainline -- wane.
The rebuilding has come after a major asset sale and debt reduction run at the start of the decade as TransCanada struggled to digest its C$7.7 billion takeover of Nova Corp, at the time Canada’s largest energy deal.
“They’ve been together for a long time in that capacity, so I‘m sure they see things the same way,” said Chad Friess, analyst with UBS Canada Securities.
TransCanada shares rose 4 Canadian cents to C$37.64 on the Toronto Stock Exchange, showing investors were neither surprised nor displeased, Friess said.
Investors can expect little divergence from the strategy Girling helped develop, he said in an interview.
“We’ve got a fairly big job ahead of us -- we’ve got our major, C$22 billion capital program to complete on time, on budget, and that’s still the primary focus,” he said. “Deriving the cash flow, earnings and dividend growth that comes with that is job one.”
Major moves now include expanding its role in moving Canadian crude to the United States and attracting shippers to its Alaska gas pipeline with partner Exxon Mobil, a long-delayed proposal that could cost as much as $41 billion.
That project, and the proposed C$16.2 billion Mackenzie pipeline to Alberta from the Northwest Territories, would help extend the life of TransCanada’s gas mainline as Western Canada’s conventional gas production dwindles.
An engineer by trade, Kvisle became CEO in 2001. He had already been charting a strategy to hone the focus on pipelines and power generation in Canada and the northern United States.
As finance chief at the time, Girling was responsible for a C$4 billion debt reduction that went along with that.
The company had spent the previous two years selling C$3.5 billion of assets following the Nova takeover. It had also cut its prized dividend.
The tough moves allowed TransCanada to take advantage of competitors’ financial troubles. It snapped up assets they put on the block, including the GTN gas pipeline system to the U.S. Pacific Northwest and California, and the ANR pipeline system in the U.S. Midwest.
Girling played major roles on those deals as well as the company’s acquisitions of numerous electricity generation businesses, most notably a stake in the Bruce Power nuclear facility in Ontario, one of the world’s largest.
After becoming president in 2006, he oversaw the move into oil transport as the country’s oil sands output climbed.
Last month, he told the Reuters Canadian Oil Sands Summit that he expects to open the $5.2 billion Keystone oil pipeline to the U.S. Midwest from Alberta by the end of June.
The line, fashioned partly from pipe previously used for gas, will initially ship 435,000 barrels a day. An extension will take the crude to Cushing, Oklahoma.
TransCanada is also planning the Keystone XL line, which will expand the system to 1.1 million bpd, including 500,000 bpd to the cluster of U.S. refineries on the Gulf of Mexico.
Editing by Rob Wilson