The funds managed by BlackRock’s Diversified Infrastructure business and investment funds managed by Morgan Stanley Infrastructure Partners will acquire PNGTS, along with the outstanding Senior Notes held at PNGTS
Thornbury Pump Station, Alberta, Canada. (Credit: TC Energy Corporation)
Canadian energy company TC Energy, together with its partner, has agreed to sell its Portland Natural Gas Transmission System (PNGTS) to BlackRock and Morgan Stanley, for $1.14bn.
The purchase price of $1.14bn includes the outstanding Senior Notes held at PNGTS, worth $250m.
The transaction is expected to be completed in mid-2024, subject to certain customary closing conditions and the receipt of regulatory approvals.
Upon closing, PNGTS will be held by funds managed by BlackRock’s Diversified Infrastructure business and investment funds managed by Morgan Stanley Infrastructure Partners.
Also, the affiliates of BlackRock and Morgan Stanley will assume the outstanding Senior Notes held at PNGTS and currently consolidated on TC Energy’s balance sheet.
The transaction proceeds will be split between TC Energy and its partner Énergir, on a pro-rata basis according to their current ownership in PNGTS.
TC Energy will get 61.7%, and Énergir will get 38.3% of the proceeds from the transaction.
TC Energy president and CEO François Poirier said: “Today’s announcement represents continued progress toward achieving our 2024 strategic priority of enhancing our balance sheet strength by delivering approximately $3bn in asset divestitures.
“We are committed to reaching our 4.75 times debt-to-EBITDA upper limit by year-end and expect to have further asset divestiture announcements through the year.
“This sale of a non-core asset at a strong valuation is a unique opportunity to support our capital rotation and deleveraging priorities while continuing to meet the needs of the communities PNGTS serves.”
PNGTS is a 295-mile (475km) FERC-regulated natural gas pipeline serving the upper New England and Atlantic Canada markets.
It receives natural gas from the Trans Quebec and Maritimes (TQM) Pipeline through the Canadian Mainline and connects to pipelines in New Hampshire, Maine and Massachusetts.
TC Energy will provide customary transition services and will work jointly with the buyers to ensure the safe and smooth transition of the natural gas system.
Barclays served as exclusive financial advisor to TC Energy and Énergir, while Bracewell acted served as legal advisor to TC Energy, on this transaction.