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TC Energy selling Portland Natural Gas Transmission System for US$1.14 billion

TC Energy Corp. and its partner, Énergir LP, are set to unload the Portland Natural Gas Transmission System (PNGTS) for a hefty sum of US$1.14 billion, which also includes taking over a US$250 million debt. This significant deal has attracted the attention of BlackRock, a financial giant managing a fund in its diversified infrastructure business, along with investment funds overseen by Morgan Stanley Infrastructure Partners.

In this transaction, TC Energy possesses a 61.7 per cent stake in PNGTS, while the remaining 38.3 per cent belongs to a subsidiary of Énergir LP. PNGTS, a 475-kilometre natural gas pipeline system, plays a crucial role in catering to the energy needs of the upper New England and Atlantic Canada markets. It efficiently receives its supply from the Trans Quebec and Maritimes Pipeline, seamlessly linked through the Canadian Mainline.

This strategic move aligns with TC Energy's ongoing efforts to streamline its portfolio and focus on core assets. The decision to divest PNGTS underscores a shift in priorities, emphasizing a more concentrated approach to its energy infrastructure ventures.

The sale of PNGTS is anticipated to conclude around mid-2024, provided it receives the necessary regulatory approvals and adheres to customary closing conditions. The involvement of regulatory bodies in overseeing such transactions ensures the protection of market integrity and the interests of all stakeholders.

BlackRock's interest in acquiring PNGTS demonstrates the continued allure of energy infrastructure investments. As a leading financial institution, BlackRock's diversified infrastructure business recognizes the potential of natural gas pipelines in sustaining and enhancing energy supply networks. The collaboration with Morgan Stanley Infrastructure Partners further underscores the appeal of PNGTS as a valuable asset in the energy infrastructure landscape.

For TC Energy and Énergir LP, the sale of PNGTS represents a strategic decision to unlock value and redeploy resources into areas with higher growth potential. This move aligns with broader industry trends where companies assess their portfolios, divesting non-core assets to bolster financial strength and flexibility.

The significance of PNGTS in serving vital energy markets cannot be overstated. The upper New England and Atlantic Canada regions heavily rely on the pipeline system for a consistent and reliable supply of natural gas. The seamless connection with the Trans Quebec and Maritimes Pipeline ensures a robust and integrated energy distribution network, contributing to regional energy security.

As the deal progresses towards its anticipated closure, stakeholders will keenly observe how the regulatory landscape and market dynamics shape the final outcome. The successful completion of this transaction will not only mark a significant financial achievement for TC Energy and Énergir LP but will also solidify BlackRock's position as a key player in the dynamic and evolving landscape of energy infrastructure investments.