CALGARY, Alberta – TC Energy Corporation (TSX, NYSE: TRP) (TC Energy) is set to bolster its natural gas infrastructure in Alberta through the strategic acquisition of the Pioneer Pipeline. Announced on March 12, 2020, by its subsidiary NOVA Gas Transmission Ltd. (NGTL), the exclusive letter of intent with Tidewater Midstream and Infrastructure Inc. and TransAlta Corporation signals a significant expansion of the NGTL System. The proposed purchase of the pioneer pipeline for $255 million marks a commitment to enhancing natural gas delivery and supporting environmental sustainability in the region.
Strategic Importance of the Pioneer Pipeline Acquisition
The acquisition of the pioneer pipeline is a calculated move to strengthen TC Energy’s footprint in the Western Canadian Sedimentary Basin (WCSB). According to Tracy Robinson, Executive Vice-President and President, Canadian Natural Gas Pipelines at TC Energy, this initiative is a “unique opportunity” to directly link WCSB gas supply with the growing power generation demands in Alberta. This strategic alignment is particularly crucial for facilitating the transition from coal to gas power, a key step in reducing carbon emissions. By leveraging the existing pioneer pipeline infrastructure, TC Energy aims to provide the most efficient and environmentally conscious solution for meeting escalating energy needs.
Pioneer Pipeline: Key Specifications and System Integration
The pioneer pipeline itself is a substantial asset, comprising 131 kilometers of operational pipeline. Strategically located within Alberta, it stretches from west of Drayton Valley to west of Edmonton. Upon finalization of the acquisition, the pioneer pipeline will be seamlessly integrated into the expansive NGTL System. This integration is underpinned by robust long-term contracts, including 15-year firm delivery contracts for a substantial 328 million cubic feet per day (mmcf/d) and an eight-year firm receipt contract for 47 mmcf/d. These contracts highlight the immediate and sustained utility of the pioneer pipeline within TC Energy’s operations.
About NGTL System and TC Energy’s Broader Impact
For over six decades, the NGTL System has been a cornerstone of Alberta’s energy infrastructure, reliably managing the receipt, gathering, transportation, and delivery of natural gas produced within the province. Spanning an impressive 25,000 km, the NGTL System plays a vital role in delivering energy from the prolific WCSB to millions of North American consumers daily. TC Energy, the parent company, emphasizes its commitment to delivering the energy that powers everyday life in a sustainable manner. With a vast network of natural gas and crude oil pipelines, coupled with power generation and storage facilities, TC Energy’s operations across Canada, the U.S., and Mexico are integral to the energy landscape. The acquisition of the pioneer pipeline further solidifies TC Energy’s role in providing essential energy solutions while supporting environmental advancements.
Disclaimer: The proposed purchase of the pioneer pipeline is contingent upon the execution of definitive agreements and regulatory approvals from the Canadian Energy Regulator. Final agreements were expected in the second quarter of 2020.
For media inquiries, please contact Kelly Matthews at 403-920-7859 or 800-608-7859. Investor & Analyst inquiries can be directed to David Moneta / Duane Alexander at 403-920-7911 or 800-361-6522.
