In conjunction with the sale, TC Energy also expects that Northern Courier Pipeline will undertake a financing of long-term, non-recourse debt, the proceeds of which are expected to be fully distributed to TC Energy, it said in a news release.
Both transactions are expected to close in the third quarter of 2019, with the equity sale contingent on the debt financing and subject to closing adjustments along with customary regulatory approvals, added the company.
The 90-km pipeline system transports bitumen and diluent between the Fort Hills mine site and Suncor Energy’s terminal north of Fort McMurray.
“The monetization of Northern Courier advances our ongoing efforts to prudently fund our industry-leading capital program while maximizing value for our shareholders,” said Russ Girling, TC Energy president and chief executive officer, in a statement.
“Along with the sale of Coolidge, which recently closed, we now expect to realize approximately $1.75 billion of proceeds from announced portfolio management activities in 2019. When combined with our significant and growing cash flow, access to capital markets and potential additional portfolio management, we believe we are well-positioned to fund our $30 billion secured capital program in a manner consistent with achieving targeted leverage metrics in 2019 and thereafter.”
The company said that following the closing of the transactions it will hold a 15 per cent aggregate interest in Northern Courier Pipeline and will account for the asset under the equity method in the company’s consolidated financial statements. TC Energy will remain the operator of the pipeline.
RBC Capital Markets is acting as exclusive financial adviser to TC Energy and as sole bookrunner and global lead agent on the debt issuance.
– Mario Toneguzzi for Calgary’s Business