The company behind the $6.2-billion Coastal GasLink pipeline in British Columbia has made a deal to sell a 65 per cent equity interest in the project.
In a news release, TC Energy Corp. said it has entered into an agreement for the sale to KKR & Co. Inc. and the Alberta Investment Management Corp., on behalf of certain of the AIMCo’s clients.
The pipeline’s planned 670-kilometre route from northeastern B.C. to LNG Canada’s export terminal in Kitimat, B.C. is intended to deliver natural gas to the $40-billion LNG Canada project.
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TC Energy also said it expects that once the deal is done, Coastal GasLink will secure financing with a syndicate of banks to fund up to 80 per cent of the project during construction. It said both transactions are expected to close in the first half of 2020, subject to customary regulatory approvals and consents, including the consent of LNG Canada.
Once the deal closes, TC Energy will hold a 35 per cent limited partnership equity interest in Coastal GasLink and will be contracted by the limited partnership to construct and operate the pipeline.
“We look forward to establishing a long-term relationship with KKR and the AIMCo as we advance this critical energy infrastructure project,” said Russ Girling, TC Energy president and chief executive officer, in a news release. “We remain fully committed to the project and will continue to construct, deliver and operate the pipeline on behalf of the partnership.”
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In 2018, TC Energy, formerly TransCanada Corp., announced it intended to reduce its interest in the Coastal GasLink pipeline project. Last January, it hired the Royal Bank of Canada to help it sell as much as a 75 per cent stake in the project.
Construction of the natural gas pipeline, a key part of the multibillion dollar LNG Canada development in Kitimat, B.C. led to protests and arrests, although 14 charges were eventually dropped.