TC Energy Sells 65% Stake in Coastal GasLink Pipeline to KKR and AIMCo

Updated 1 year 2 months ago

TC Energy entered into an agreement to sell a 65% non-operated interest in the Coastal GasLink pipeline project to KKR and AIMCo in December 2019. Concurrent with the sale, the project will enter into a secured project financing credit facility with a syndicate of banks to fund up to 80% of the project during construction. TC will receive upfront proceeds that include reimbursement of KKR and AIMCo's share of the project costs incurred as of the closing date as well as additional payments during construction. The company will record an after-tax gain of CAD 600 million associated with the sale, and the transaction is expected to meet the project's funding requirements through completion.

The pipeline project includes 416 miles of pipeline supporting 2.1 billion cubic feet per day of capacity from Dawson Creek, British Columbia to the planned LNG Canada facility in Kitimat, British Columbia. This transaction was contemplated in TC Energy's 25-year transportation service agreements with LNG Canada. In conjunction with the sale, TC will provide First Nations an option to acquired a 10% interest in the pipeline on similar terms. RBC Capital Markets advised TC Energy on the sale while HSBC Securities and TD Securities advised KKR.

The deal closed in May 2020 with TC Energy realizing $2.1 billion in immediate proceeds.