TransCanada Corporation (TRP) (TRP) (TransCanada) today announced it has entered into an agreement to sell a 49.9 percent interest in Portland Natural Gas Limited Partnership (PNGTS) to its master limited partnership, TC PipeLines, LP (TCP), for a purchase price of US$223 million. The sale is expected to close at the end of 2015, upon satisfaction of closing conditions.
“The PNGTS transaction is a continuation of our strategy to drop down the remainder of TransCanada’s U.S. natural gas pipeline assets to the TC PipeLines partnership,” said Russ Girling, TransCanada’s president and chief executive officer. “Asset sales to the partnership provide TransCanada with cash proceeds to help fund our capital program and further diversify the partnership’s asset base, positioning it for continued growth.”
The US$223 million transaction is comprised of US$188 million in cash together with the assumption of a proportionate share of PNGTS debt in the amount of US$35 million. The EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) from this 49.9 percent interest in PNGTS is expected to be approximately US$23 million in 2016. The sales agreement also provides for additional payments from TC PipeLines, LP if PNGTS is expanded in the future.
PNGTS is a 474 kilometre (295 mile) high-capacity, high-pressure interstate natural gas pipeline which began serving New England’s energy needs in March 1999. The pipeline connects with the TransQuébec and Maritimes Pipeline at the Canadian border near East Hereford, Québec and delivers natural gas to customers in the U.S. northeast. It shares facilities with the Maritimes and Northeast Pipeline from Westbrook, Maine to a connection with the Tennessee Gas Pipeline System near Boston, Massachusetts. After completion of the transaction, TransCanada will continue to hold a direct 11.8 percent interest in PNGTS.
With more than 65 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and liquids pipelines, power generation and gas storage facilities. TransCanada operates a network of natural gas pipelines that extends more than 68,000 kilometres (42,100 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with 368 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns or has interests in over 10,900 megawatts of power generation in Canada and the United States. TransCanada is developing one of North America’s largest liquids delivery systems. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP. Visit TransCanada.com and our blog to learn more, or connect with us on social media and 3BL Media.