CALGARY — TC Energy Corp. is continuing its push to sell off assets to pay for new pipelines and growth projects with a $2.87-billion deal announced after markets closed Tuesday.
The transaction will see the Calgary-based pipeline giant formerly known as TransCanada sell two of its natural gas-fired power plants and a 50 per cent stake in a third gas plant to Ontario Power Generation Inc. (OPG), which has been aggressively buying assets in recent weeks.
The sale includes the 900-Megawatt Napanee generating station, the 683-Megawatt Halton Hills plant and half of the 550-Megawatt Portlands Energy Centre in Toronto. OPG already owned 50 per cent of the Portlands facility.
TC Energy now says it will sell off a total of $6.3 billion worth of assets in 2019 and use that cash to fund its growth program and “further strengthen its financial position.” The company had $35.8 billion in long-term debt at the end of the first quarter.
“We continue to be a significant private-sector power generator in Canada and are committed to the ongoing multi-billion-dollar life-extension program at the Bruce Power nuclear facility in Ontario,” TC Energy president and CEO Russ Girling said in a release, adding the company was actively looking for new “low-risk” power projects in North America for future investments.
Still, he said the company would be using the funds to pay for “near-term” capital projects, which include the construction of the Coastal GasLink Pipeline, connecting gas production in British Columbia with the $40-billion LNG Canada project in Kitimat, B.C.
Meanwhile, the deal represents the third acquisition by OPG in the past two months after announcing deals in June to buy Cube Hydro and also the 50 per cent interest it didn’t already own in another natural gas power plant from Calgary-based ATCO Ltd.-subsidiary Canada Utilities Ltd.
The company describes itself as “generating a stronger, cleaner, more prosperous Ontario” and pointed out that natural-gas-fired power was necessary as a base-load electricity supply in a market with solar and wind power.
“The role that natural gas plays in maintaining system reliability has become even more important with the addition of intermittent wind and solar generation in recent years,” Ontario Power Generation president and CEO Ken Hartwick said in a release.
“Natural gas is the partner or enabler of renewable energy, providing the flexibility required to ensure a reliable electricity system,” Hartwick said.
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