Canada-based energy company TC Energy has announced the completion of the sale of a 65% stake in a Coastal GasLink pipeline project.
In December last year, TC Energy entered into an agreement to sell the stake in the pipeline to private equity firms KKR and Alberta Investment Management Corporation (AIMCo).
The Coastal GasLink Pipeline Limited Partnership has also executed a credit agreement with a syndicate of banks to fund the majority of the construction costs for the project.
Additionally, the firm is committed to collaborating with the 20 First Nations who have executed the agreements with Coastal GasLink project.
The 20 First Nations will have an opportunity to invest in the project with an option to acquire a 10% equity interest in Coastal GasLink project on similar terms as the 65% stake.
TC Energy said: “The introduction of high-quality partners, establishment of a dedicated project-level financing facility, recovery of cash payments through construction for carrying charges on costs incurred and remuneration for costs to date are expected to substantially satisfy TC Energy’s Coastal GasLink funding requirements through project completion, further solidifying the Company’s financial flexibility.”
The gas will be converted into the liquefied state at Kitimat
The project is a 670km of gas pipeline, which is being developed in British Columbia, Canada.
It is being developed by LNG Canada, which is a joint venture between four major energy companies that include Shell, PETRONAS, PetroChina, Mitsubishi Corporation, KOGAS.
Upon completion, the pipeline is estimated to have an initial capacity of 2.1 billion cubic feet of natural gas on daily basis.
It will connect Western Canadian Sedimentary Basin natural gas supply from the Dawson Creek, B.C. area to the LNG Canada liquefaction and export facility being constructed in Kitimat.
In March this year, TC Energy’s wholly owned subsidiary NOVA Gas Transmission (NGTL) has signed a letter of intent with Tidewater Midstream and Infrastructure and TransAlta to purchase the Pioneer Pipeline for $255m.
