TC Energy Completes Partial Monetization and Project Financing Transactions for Coastal GasLink

Source Company Press Release
Company TC Energy Corporation, AIMCo, Kohlberg Kravis Roberts & Co.
Tags Corporate: Overview/Strategy, Country: Canada, M&A: Asset Deal, Deals, Midstream: Pipeline
Date May 25, 2020

TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) announced today that it has completed the sale of a 65 per cent equity interest in the Coastal GasLink Pipeline Project (Coastal GasLink or the Project). In addition, the Coastal GasLink Pipeline Limited Partnership has executed a credit agreement with a syndicate of banks extending non-recourse project-level financing to fund the majority of the construction costs for the Project which, with the closing of the equity sale, are available to be drawn.  Together, these transactions have resulted in the Company realizing immediate proceeds of approximately $2.1 billion.

TC Energy remains committed to partnering with the 20 First Nations who have executed agreements with Coastal GasLink and, as previously announced, has provided an opportunity for them to invest in the Project with an option to acquire a 10 per cent equity interest in Coastal GasLink on similar terms as the 65 per cent interest.

The introduction of high-quality partners, establishment of a dedicated project-level financing facility, recovery of cash payments through construction for carrying charges on costs incurred and remuneration for costs to date are expected to substantially satisfy TC Energy’s Coastal GasLink funding requirements through project completion, further solidifying the Company’s financial flexibility.

Coastal GasLink involves the construction of 670 kilometres (416 miles) of pipeline and associated facilities. Once completed, the pipeline will have an initial capacity of 2.1 billion cubic feet per day and connect abundant Western Canadian Sedimentary Basin natural gas supply from the Dawson Creek, B.C. area to the LNG Canada liquefaction and export facility being constructed in Kitimat, B.C. All necessary regulatory permits have been received for the Project and construction is underway. Coastal GasLink continues to engage with Indigenous and local communities as we safely progress essential construction activities across the route.

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