TC Energy Corp. is set to divide the company into two separate entities by spinning off its liquids pipeline business, to be named South Bow Corp., according to TC executives. This decision, initially announced in July, is progressing as planned and is expected to be completed during the second half of 2024. Bevin Wirzba, currently the group president for liquids pipelines and the Coastal GasLink pipeline at TC Energy, will assume the role of chief executive officer at South Bow. The Canadian company anticipates that this spin-off will generate shareholder value and position both new companies for future growth.
In addition to the spin-off, TC Energy CEO Francois Poirier revealed that the company is advancing plans for a C$3 billion (US$2.17 billion) divestiture program in 2024. This initiative aims to aid in reducing TC Energy's debt and provide funding for other projects.
To support this divestiture program, TC Energy previously announced in July that it would sell a 40% stake in both the Columbia Gas Transmission LLC and Columbia Gulf Transmission LLC natural gas pipeline systems. The sale was successfully completed in early October, resulting in C$5.3 billion in cash proceeds for the company, as confirmed by Poirier.
One of the primary objectives of this divestiture strategy is for TC Energy to decrease its exposure in Mexico as a percentage of its overall average, according to the CEO's statement during the call.
BP Considers Asset Sales as part of Strategic Program
BP is considering discrete asset sales in the U.S. market as part of its strategic program, according to the company's spokesperson, Poirier. However, he clarified that for joint ventures, the focus will be on Canadian and Mexican assets. Poirier refrained from divulging additional details, citing the sensitive nature of ongoing conversations.
In the third quarter, BP reported total segmented earnings of C$644 million, a significant decrease compared to C$1.784 billion during the same period last year. This decline was primarily due to a C$1,179 million after-tax impairment charge related to the company's equity investment in the Coastal GasLink Pipeline Ltd. Partnership.
Undeterred by the financial setback, BP announced the completion of physical construction on the 416-mile pipeline last week. And now, with mechanical completion achieved ahead of schedule, the company has commenced gas introduction. Their goal is to begin supplying customers by year end.
Reporting by Steve Cronin; Editing by Michael Kelly
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