TC Energy to sell 40% interest in Columbia Gas systems to GIP in $5.2bn deal

TC Energy Corporation, a significant player in the energy sector listed on both TSX and NYSE, announced that it has inked a deal to sell a 40% stake in its Columbia Gas Transmission, LLC (Columbia Gas) and Columbia Gulf Transmission, LLC (Columbia Gulf) systems.

This $5.2 billion transaction implies an enterprise value to a comparable EBITDA multiple of approximately 10.5 times TC Energy’s 2023 base outlook. The proceeds will be paid in cash at the close of the deal, following customary adjustments.

In this partnership with Global Infrastructure Partners (GIP), TC Energy will maintain operations of the systems while both parties contribute to the system’s annual maintenance and modernization. “Today’s announcement represents a major milestone in achieving our 2023 strategic priorities,” stated François Poirier, TC Energy’s President and Chief Executive Officer.

With pipelines spanning more than 15,000 miles, the Columbia Gas and Columbia Gulf systems contribute substantially to the daily U.S. natural gas demand, including about 20% of U.S. liquified natural gas (LNG) export supply. This positions them to play a significant role in supporting the transition to lower-emitting energy sources.

The transaction is slated to conclude in the fourth quarter of 2023, subject to the standard closing conditions. In line with the agreement, the equity interests of Columbia Pipeline Group, Inc. in Columbia Gas and Columbia Gulf will be transferred to a newly formed entity, Columbia Pipelines Operating Company, LLC. This new company will be directly held by another newly created entity, Columbia Pipelines Holding Company, LLC, through which TC Energy and GIP will hold their equity interests.