TC Energy to Acquire Pioneer Pipeline
TransAlta Corp. along with its partner Tidewater Midstream & Infrastructure Ltd. plan to sell the Pioneer Pipeline to NOVA Gas Transmission Ltd., a subsidiary of TC Energy, for C$255 million. As part of the deal, NGTL will integrate the Pioneer Pipeline into its natural gas pipeline infrastructure in Alberta.
The Pioneer Pipeline is a 120km pipeline used to transport sweet natural gas from the BRC to TransAlta’s Keephills and Sundance facilities. The pipeline had initial capacity of 130 MMcf/d, supported by a 15-year take or pay commitment from TransAlta.
Benefits of the transaction to TransAlta include:
- Access to NGTL's liquid natural gas network and gas trading hub;
- Additional reliability and flexibility of having two pipelines delivering natural gas to the company's power stations;
- Access to a broad and diversified group of gas producers and resource basins; and
- Cash proceeds that can fund the company's natural gas conversion program
TransAlta will enter into long-term delivery transportation agreements with NGTL, bringing the total of new and existing natural gas pipeline transportation service to 400 TJ/day by 2023. TransAlta's current commitments, including the 139 TJ/day with Tidewater, will remain in place until closing.
"Tidewater has been an exceptional partner that was able to build the Pioneer Pipeline well ahead of schedule, allowing us to significantly reduce our carbon emissions and costs," said Dawn Farrell, President and CEO. "Going forward, we are excited to work with TC Energy to meet our transportation requirements as we continue to execute our clean energy strategy, which will support our goals as a leader in clean electricity generation."
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