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TC Energy's Pipeline Deal With Indigenous Communities Hits Snag
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TC Energy Corporation (TRP - Free Report) announced that it has recently encountered an obstacle that caused a delay in its deal to sell a minority stake in the NGTL System and the Foothills Pipeline assets to an indigenous-owned investment partnership in Canada. The deal, valued at C$1 billion, has been delayed owing to a transaction structuring issue. The deal, aimed at reducing TC Energy’s debt, is a key part of the company’s strategy to achieve its C$3 billion asset sale target for 2024.
The deal, when completed, is expected to give 72 indigenous communities the right to own an equity stake in the NGTL System and the Foothills Pipeline assets. It has the support of the Alberta Indigenous Opportunities Corporation (“AIOC”).
The AIOC is an organization that offers loan guarantees in the range of $20-$250 million for projects it deems fit. It is providing a $1 billion equity loan guarantee for the indigenous-owned investment partnership to support the deal. TRP believes that the deal will enable the indigenous communities to invest in these natural gas assets, leading to their prosperity and economic growth.
The NGTL system is a major asset in TRP’s pipeline network. It connects a major portion of the natural gas production from western Canada to domestic markets as well as international export markets. The pipeline network spans approximately 24,400 kilometers (15,150 miles). TC Energy has mentioned that it continues to maintain a focus on finalizing the deal.
PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. The company stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.
VAALCO Energy is an independent energy company involved in upstream business operationswith 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.
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TC Energy's Pipeline Deal With Indigenous Communities Hits Snag
TC Energy Corporation (TRP - Free Report) announced that it has recently encountered an obstacle that caused a delay in its deal to sell a minority stake in the NGTL System and the Foothills Pipeline assets to an indigenous-owned investment partnership in Canada. The deal, valued at C$1 billion, has been delayed owing to a transaction structuring issue. The deal, aimed at reducing TC Energy’s debt, is a key part of the company’s strategy to achieve its C$3 billion asset sale target for 2024.
The deal, when completed, is expected to give 72 indigenous communities the right to own an equity stake in the NGTL System and the Foothills Pipeline assets. It has the support of the Alberta Indigenous Opportunities Corporation (“AIOC”).
The AIOC is an organization that offers loan guarantees in the range of $20-$250 million for projects it deems fit. It is providing a $1 billion equity loan guarantee for the indigenous-owned investment partnership to support the deal. TRP believes that the deal will enable the indigenous communities to invest in these natural gas assets, leading to their prosperity and economic growth.
The NGTL system is a major asset in TRP’s pipeline network. It connects a major portion of the natural gas production from western Canada to domestic markets as well as international export markets. The pipeline network spans approximately 24,400 kilometers (15,150 miles). TC Energy has mentioned that it continues to maintain a focus on finalizing the deal.
TRP’s Zacks Rank and Key Picks
Currently, TRP carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are PEDEVCO Corp. (PED - Free Report) , MPLX LP (MPLX - Free Report) and VAALCO Energy (EGY - Free Report) . PEDEVCO and MPLX presently sport a Zacks Rank #1 (Strong Buy) each, while VAALCO Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. The company stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.
VAALCO Energy is an independent energy company involved in upstream business operationswith 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.