The deal helps producers address the glut in B.C. natural gas.

Alberta Investment Management is linking up with private equity giant KKR to purchase a big stake in TC Energy’s Coastal GasLink Pipeline. The Canadian pipeline project is part of a massive, C$40 billion effort to pump natural gas across British Columbia. The project will supply LNG from Dawson Creek to the plant near Kitimat. The project will pump about 2.1 billion cubic feet of natural gas each day.

Alberta Investment Management and KKR are buying a 65% stake.

Alberta Investment Management Deal

Royal Dutch Shell is building the LNG Canada project. The project will help Canadian producers move the glut of natural gas in the region. Producers in the area have struggled due to the impact of record U.S. production, which has driven prices lower.

“The partial monetization of Coastal GasLink advances our ongoing efforts to prudently fund our $30 billion secured capital program while maximizing value for our shareholders,” said Russ Girling, TC Energy President and CEO. “We look forward to establishing a long-term relationship with KKR and AIMCo as we advance this critical energy infrastructure project. We remain fully committed to the Project and will continue to construct, deliver and operate the pipeline on behalf of the partnership.”

TC Energy expects that Coastal GasLink will enter into a secured project financing construction credit facility with a syndicate of banks to fund up to 80 percent of the Project during construction. Both transactions will likely close in the first half of 2020.

Following the close of the transaction, TC Energy will hold a 35% limited partnership equity interest in Coastal GasLink.

Finally, TC Energy is working with the 20 First Nations that have executed agreements with Coastal GasLink to provide them with an opportunity to invest in the Project. As a result, in conjunction with this sale, the Company will provide the First Nations with an option to acquire a 10% equity interest in Coastal GasLink on similar terms.

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