TC Energy Corp. and its partner Northern New England Investment Co. Inc., a subsidiary of Energir LP, have agreed to sell the Portland Natural Gas Transmission System (PNGTS). TC Energy said in a media release that a purchase and sale agreement was signed to sell the asset to BlackRock, through a fund managed by its Diversified Infrastructure business and investment funds managed by Morgan Stanley Infrastructure Partners.
The deal is valued at $1.14 billion, including the assumption of $250 million of outstanding senior notes held at PNGTS. This transaction implies a valuation of approximately 11.0 times the reported 2023 comparable EBITDA, TC Energy said.
PNGTS is a 475-kilometer (295-mile), FERC-regulated transporter of natural gas serving the upper New England and Atlantic Canada markets. The pipeline receives natural gas from the Trans Quebec and Maritimes (TQM) Pipeline via the Canadian Mainline.
TC Energy said it will provide customary transition services and will work jointly with the buyer to ensure the safe and orderly transition of this critical natural gas system.
“Today’s announcement represents continued progress toward achieving our 2024 strategic priority of enhancing our balance sheet strength by delivering approximately $3 billion in asset divestitures”, said François Poirier, TC Energy’s President and Chief Executive Officer. “We are committed to reaching our 4.75 times debt-to-EBITDA upper limit by year-end and expect to have further asset divestiture announcements through the year.
“This sale of a non-core asset at a strong valuation is a unique opportunity to support our capital rotation and deleveraging priorities while continuing to meet the needs of the communities PNGTS serves”.
The cash proceeds will be split pro-rata according to the current PNGTS ownership interests (TC Energy 61.7 percent, Energir 38.3 percent) and will be paid at closing, subject to certain customary adjustments, TC Energy said.
TC Energy said that the transaction is expected to close in mid-2024, subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions.
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Read More: TC Energy Sells PNGTS to BlackRock for $1.14 Billion