TransCanada to divest natural gas marketing business

TransCanada PipeLines Ltd., Calgary, plans to divest its natural gas marketing business to focus on gas transmission and power businesses in Canada and the US. Last year, TransCanada divested $3 billion (Can.) worth of assets as part of a focusing program.

May 9, 2001

2 min read

By the OGJ Online Staff

HOUSTON, May 9 -- TransCanada PipeLines Ltd., Calgary, plans to divest its natural gas marketing business to focus on gas transmission and power businesses in Canada and the US.

Last year, TransCanada divested $3 billion (Can.) worth of assets as part of a focusing program (OGJ Online, Nov. 23, 2000).

The company plans to begin the process of divesting the marketing assets over the next couple of months.

Hal Kvisle, TransCanada's president and CEO, said TransCanada needs predictable cash flows in order to maintain its balance sheet, credit rating and attractive dividends expected by investors.

"... A gas marketing business requires significant equity capital, a tolerance for volatility and high transactional volumes, as well as a willingness to absorb both positive and negative financial performance," said Kvisle.

He added, "TransCanada has chosen to focus on infrastructure projects with stable returns from significant capital investments in its regulated and non-regulated businesses.

TransCanada owns 38,000 km of pipeline and controls or manages 1,700 Mw of power.

There are 150 TransCanada employees directly associated with the gas marketing business to be divested. "We recognize our employees bring the most value to the gas marketing business, so we will negotiate with prospective buyers to maximize opportunities for these employees," said Kvisle.