TC Energy sells shares of Prince Rupert LNG pipeline project
The company said the move aligns with its strategy to focus on smaller projects.
Key Takeaways:
- TC Energy is selling its shares in the Prince Rupert Gas Transmission Project to Nisga’a Nation and Western LNG.
- The proposed project is a 900 kilometre natural gas pipeline running from Hudson’s Hope to Lelu Island, near Prince Rupert.
- The Nation and Western believe that as other B.C. pipeline contracts come to a close, experienced contractors will become available to work on the project.
The Whole Story:
TC Energy Corporation announced it has entered into a binding letter agreement with Nisga’a Nation and Western LNG regarding the purchase and sale of all outstanding shares in Prince Rupert Gas Transmission Holdings Ltd. and the limited partnership interests in Prince Rupert Gas Transmission Limited Partnership (PRGT).
PRGT is a wholly owned subsidiary of TC Energy and the developer of a natural gas pipeline project in B.C. The proposed project is a 900 kilometre natural gas pipeline running from Hudson’s Hope to Lelu Island, near Prince Rupert. The pipeline route would include both terrestrial and marine sections and would have a proposed capacity of 2-3.6 billion cubic feet per day (Bcf/day).
“Today is a historic day for the Nisga’a Nation and represents a sea change in major industrial development in this country,” said Eva Clayton, president of the Nisga’a Lisims Government. “In taking an equal ownership role in this pipeline, we are signalling a new era for Indigenous participation in the Canadian economy. First Nations are no longer being left behind as generational wealth is built from the resources of our lands. At long last, hop and optimism are returning to Indigenous communities across northern B.C.”
TC Energy stated that the transaction demonstrates its resolve toward delivering its 2024 strategic priorities while facilitating the development of critical energy infrastructure. TC Energy’s strategic priorities are focused on staying within its $6 to $7 billion annual net capital expenditure limit, post-2024, maximizing the value of its assets and further enhancing the strength and flexibility of its balance sheet.
“We are pleased to see this important project move forward while remaining firm on our commitment to our strategic priorities. This is an important agreement that will see Indigenous co-ownership and development of an integrated LNG project. Enabling LNG development in British Columbia is good for Indigenous communities, our customers, supports the long-term growth of the WCSB and global emissions reduction through the export of responsibly produced Canadian natural gas,” said François Poirier, president and CEO, TC Energy.
As part of the letter agreement, TC Energy has committed to provide transition services, on a reimbursable basis, to facilitate the seamless transition of the pipeline project and support development work planned for this year. Subject to the execution of definitive agreements and customary closing conditions, the transaction is expected to close in the second quarter of 2024. Initial proceeds from the transaction are not expected to be material to TC Energy, with the potential to receive additional payments contingent upon the project achieving final investment decision and commercial operation.
The Nisga’a Nation and Western LNG stated that they plan to enter into an agreement with an internationally respected construction manager to build the pipeline. The Nation and Western believe that as other B.C. pipeline contracts come to a close, experienced contractors will become available to work on the project.
