TC Energy to spin off liquids pipelines business for enhanced growth

TC Energy Corporation (TSX, NYSE: TRP) announced that its Board of Directors has approved plans for the company to split into two independent, publicly listed companies by spinning off its Liquids Pipelines business. The division, expected to be accomplished on a tax-free basis in the latter half of 2024, comes after a two-year strategic review and promises to unlock significant shareholder value.

The spinoff aims to provide both companies greater flexibility to pursue their growth objectives, thereby enhancing efficiencies and operational excellence. Post-spinoff, TC Energy will emerge as an industry leader in natural gas and energy solutions, perfectly positioned to meet the rising demand for reliable, lower-carbon energy. The Liquids Pipelines business will transform into a critical infrastructure company that links resilient and secure supply to high-demand markets, opening up opportunities for incremental growth and value creation.

François Poirier, President and CEO of TC Energy, stated that the separation would enable both entities to better unlock shareholder value. Post-Transaction, TC Energy will concentrate on natural gas infrastructure, supported by robust, long-term fundamentals, and energy solutions, bolstered by nuclear, pumped hydro energy storage, and new energy opportunities.

The newly formed Liquids Pipelines Company will enhance its unmatched asset value by increasing capacity on underutilized sections of the system and establishing connections to additional receipt and delivery points. It’s projected that the Liquids Pipelines Company’s comparable EBITDA will grow at a compound annual growth rate of 2 to 3% through 2026.

Earlier this week, TC Energy inked a deal to sell a 40% stake in its Columbia Gas Transmission, LLC (Columbia Gas) and Columbia Gulf Transmission, LLC (Columbia Gulf) systems to Global Infrastructure Partners (GIP).