TC Energy Corp., formerly known as TransCanada Corp., agreed to off-load an 85% stake in the Northern Courier pipeline to Alberta Investment Management Corp. for estimated gross proceeds of about C$1.15 billion.
The 56-mile pipeline system delivers bitumen and diluent between the Fort Hills mine site and Suncor Energy Inc.'s terminal north of Fort McMurray, Alberta. Together with the sale, the pipeline is expected to undertake a long-term, nonrecourse debt financing, with proceeds to be fully distributed to TC Energy, according to a May 28 news release.
TC Energy anticipates closing both transactions in the third quarter. Upon completion, the company would own a 15% stake in the pipeline and remain its operator.
President and CEO Russell Girling said the proceeds from the deals — along with proceeds from the recently closed sale of the Coolidge Generating Station and increased cash flow — would allow TC Energy "to fund [its] C$30 billion secured capital program in a manner consistent with achieving targeted leverage metrics in 2019 and thereafter."
RBC Capital Markets is the exclusive financial adviser to TC Energy, as well as the sole book runner and global lead agent on the debt financing transaction.
TC Energy owns and operates a large network of natural gas and liquids pipelines across major supply basins in North America.