TC Energy Advances Plans to Spinoff Liquids Pipeline Segment — OPIS

TC Energy Corp. is moving ahead with plans to split the company into two entities by spinning off its liquids pipeline business, which will be called South Bow Corp., TC executives said Wednesday.

The company announced the move in July and on Wednesday said it was on track to finalize the move during the second half of 2024. Bevin Wirzba, TC Energy's current group president for liquids pipelines and the Coastal GasLink pipeline, is intended to be the chief executive officer of South Bow. The Canadian company has said spinning off the liquids pipelines will unlock value for shareholders while positioning both new companies for future growth.

During Wednesday's call, TC Energy CEO Francois Poirier said the company was also moving forward with plans for a C$3 billion (US$2.17 billion) divestiture program in 2024 intended to help the company reduce its debt and help fund other projects.

As part of that effort, the company in July also announced it was selling a 40% stake in both the Columbia Gas Transmission LLC and Columbia Gulf Transmission LLC natural gas pipeline systems. That sale closed in early October, with the company receiving C$5.3 billion in cash proceeds, Poirier said.

One goal in the divestiture is for TC Energy to reduce its exposure in Mexico as a percentage of the overall average, the CEO said.

"Part of that program may include some discrete asset sales in the U.S., but in terms of entering into joint ventures...we can look to our Canadian assets and our Mexico assets for those types of transactions being contemplated," Poirer told analysts.

Poirier declined to give additional details of possible plans, citing "the sensitivities of our conversations" involving the efforts.

For the third quarter, the company reported total segmented earnings of C$644 million, compared to C$1.784 billion during the same period last year. The company said the change was largely due to the after-tax impairment charge of C$1,179 million related to the company's equity investment in the Coastal GasLink Pipeline Ltd. Partnership. Company officials announced last week that physical construction was completed on the 416-mile pipeline and on Wednesday said mechanical completion had also been reached ahead of the initial year-end timeline. Wirzba said the company has started introducing natural gas into the pipeline and hoped to be able to begin supplying customers by year end.

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--Reporting by Steve Cronin, scronin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com

(END) Dow Jones Newswires

November 08, 2023 15:57 ET (20:57 GMT)

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