TC Energy Corp., Calgary, has entered into an agreement whereby Global Infrastructure Partners will acquire a 40% interest in Columbia Gas Transmission LLC and Columbia Gulf Transmission LLC for US $3.9 billion.
Columbia Gas and Columbia Gulf will be held in a new joint venture partnership. TC Energy will continue to operate the systems. The parties will jointly invest in annual maintenance, modernization, and sanctioned growth capital to further enhance system capacity and reliability, the operator said in a release July 24.
GIP will fund its 40% share of gross capital expenditures, which are expected to average more than US$1 billion annually over the next 3 years.
The Columbia Gas and Columbia Gulf pipelines span more than 15,000 miles across North America. TC Energy acquired the assets in 2016 (OGJ Online, Mar. 17, 2016).
The Columbia Gas Transmission system extends from New York state to the Midwest and Southeast. The network includes 11,899 miles (18,768 km) of pipeline and about 630 bcf of natural gas storage. The Columbia Gulf Pipeline stretches across 3,367 miles (5,419 km) and connects to virtually every major pipeline in the US Gulf Coast and to additional Midwestern lines.
In connection with the transaction, Columbia Pipeline Group, Inc. (CPG) will contribute all of its equity interests in its wholly owned subsidiaries, Columbia Gas and Columbia Gulf, to a newly formed wholly owned entity, Columbia Pipelines Operating Co. LLC (CPOC), which will be directly held by a newly formed wholly-owned entity, Columbia Pipelines Holding Co. LLC (CPHC). CPHC represents the entity through which TC Energy and GIP will each hold their equity interest.
The transaction is expected to close in this year’s fourth quarter, subject to customary closing conditions.
