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TC Energy (TRP) Partners With Indigenous Communities in Canada
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TC Energy Corporation (TRP - Free Report) announced that it has entered into an equity purchase agreement with an Indigenous-owned investment partnership to own a 5.34% minority interest in the NGTL System and the Foothills Pipeline assets. The gross purchase price for these assets, together known as the Partnership Assets, was $1 billion.
The agreement was supported by the Alberta Indigenous Opportunities Corporation (“AIOC”) and negotiations were carried out by a consortium committee. The committee represented specific Indigenous Communities from Alberta, British Columbia and Saskatchewan. The consortium advocated for its unique interests during the partnership discussions.
The company stated that the transaction implies an enterprise value of approximately $1.65 billion, assuming the proportionate share of collective debt of the Partnership Assets.
This significant partnership will give 72 Indigenous Communities, who are closest to the Partnership Assets, a right to own equity in these natural gas infrastructure assets. The Indigenous Communities will, thereby, own equity in the 25,000-kilometre integrated network of natural gas infrastructure spread across western Canada. By investing in these energy assets, the communities will gain access to long-term revenue sources that would be helpful in bringing about a positive and significant change for them.
TRP highlighted the innovative approach that the Alberta Indigenous Opportunities Corporation has taken in supporting economic growth for Indigenous communities. The company stated that allowing these communities to invest will translate to greater prosperity and economic sovereignty. It also expressed pride in being part of a historic agreement.
TC Energy, along with AIOC and the Consortium Committee, has focused on developing a partnership that will be mutually beneficial for all the parties involved within Canada's resource economy. The consortium specifically played an important role in improving the deal terms, which are anticipated to benefit the Indigenous Communities in the future.
Furthermore, to emphasize the importance of the partnership, a representative of the participating communitieswill be invited to join as a member of TC Energy’s Indigenous Advisory Council (“IAC”). The IAC was established in 2021, with an aim to guide the leadership team at TC Energy on initiatives related to supporting the well-being of Indigenous Communities.
The Partnership Assets will form a critical part of TRP’s pipeline network and play a critical role in transporting energy across North America. The systems play a critical role by integrating approximately 80% of natural gas production from the Western Canadian Sedimentary Basin to domestic and export markets. The assets, backed by federal rate regulation, are expected to deliver steady and reliable returns in the long term.
The agreement, supported by AIOC and the Consortium Committee, will be presented to the Indigenous Communities for review. Each community will decide whether to participate in the opportunity, exercising its right to self-determination. However, the transaction and its size are not dependent upon the participation of any or all the communities.
The transaction is anticipated to be closed by the third quarter of 2024, contingent upon the receipt of Band Council and Settlement Resolutions by participating communities and the financing of the project.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
VAALCO Energyis an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
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TC Energy (TRP) Partners With Indigenous Communities in Canada
TC Energy Corporation (TRP - Free Report) announced that it has entered into an equity purchase agreement with an Indigenous-owned investment partnership to own a 5.34% minority interest in the NGTL System and the Foothills Pipeline assets. The gross purchase price for these assets, together known as the Partnership Assets, was $1 billion.
The agreement was supported by the Alberta Indigenous Opportunities Corporation (“AIOC”) and negotiations were carried out by a consortium committee. The committee represented specific Indigenous Communities from Alberta, British Columbia and Saskatchewan. The consortium advocated for its unique interests during the partnership discussions.
The company stated that the transaction implies an enterprise value of approximately $1.65 billion, assuming the proportionate share of collective debt of the Partnership Assets.
This significant partnership will give 72 Indigenous Communities, who are closest to the Partnership Assets, a right to own equity in these natural gas infrastructure assets. The Indigenous Communities will, thereby, own equity in the 25,000-kilometre integrated network of natural gas infrastructure spread across western Canada. By investing in these energy assets, the communities will gain access to long-term revenue sources that would be helpful in bringing about a positive and significant change for them.
TRP highlighted the innovative approach that the Alberta Indigenous Opportunities Corporation has taken in supporting economic growth for Indigenous communities. The company stated that allowing these communities to invest will translate to greater prosperity and economic sovereignty. It also expressed pride in being part of a historic agreement.
TC Energy, along with AIOC and the Consortium Committee, has focused on developing a partnership that will be mutually beneficial for all the parties involved within Canada's resource economy. The consortium specifically played an important role in improving the deal terms, which are anticipated to benefit the Indigenous Communities in the future.
Furthermore, to emphasize the importance of the partnership, a representative of the participating communitieswill be invited to join as a member of TC Energy’s Indigenous Advisory Council (“IAC”). The IAC was established in 2021, with an aim to guide the leadership team at TC Energy on initiatives related to supporting the well-being of Indigenous Communities.
The Partnership Assets will form a critical part of TRP’s pipeline network and play a critical role in transporting energy across North America. The systems play a critical role by integrating approximately 80% of natural gas production from the Western Canadian Sedimentary Basin to domestic and export markets. The assets, backed by federal rate regulation, are expected to deliver steady and reliable returns in the long term.
The agreement, supported by AIOC and the Consortium Committee, will be presented to the Indigenous Communities for review. Each community will decide whether to participate in the opportunity, exercising its right to self-determination. However, the transaction and its size are not dependent upon the participation of any or all the communities.
The transaction is anticipated to be closed by the third quarter of 2024, contingent upon the receipt of Band Council and Settlement Resolutions by participating communities and the financing of the project.
Zacks Rank and Other Key Picks
Currently, TRP carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the energy sector are SM Energy (SM - Free Report) , VAALCO Energy (EGY - Free Report) and Energy Transfer LP (ET - Free Report) . SM Energy presently sports a Zacks Rank #1 (Strong Buy), while VAALCO and Energy Transfer carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
VAALCO Energyis an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.