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Canadian energy giant TransCanada Corporation (ticker: TRP) recently agreed to sell 49.3% stake in Iroquois Gas Transmission System LP and the remaining 11.8% stake in Portland Natural Gas Transmission System (PNGTS) to pipeline operator TC PipeLines, LP (ticker: TCP) for $765 million. Notably, TransCanada owns 26% interest in TC PipeLines through its subsidiaries.
We would like to remind investors that TransCanada sold 49.9% interest in PNGTS to TC PipeLines in Jan 2016.
According to TransCanada, the deal will incorporate cash part of $597 million and the rest $168 million will be in the form of debt at Iroquois and PNGTS. The debt in these two pipelines will be proportionate in nature. The company expects the transactions to be over by mid-year.
TransCanada expects the meaningful role of TC PipeLines, in funding part of its short-term capital program of $23 billion, will be confirmed by this deal.
Iroquois is an interstate gas pipeline company that provides services focusing on transportation according to the need of the customers in the energy sector. The company operates in North America.
PNGTS is responsible for interstate gas transportation. It has a high capacity and high-pressure natural gas pipeline. It started serving the growing energy needs of New England in 1999. Presently, the company strategically operates between three major networks in North America, offering significant opportunities to the region’s growing energy market.
