(Reuters) — North American pipeline company TC Energy, which has been seeking to sell assets and cut debt, said on Thursday it would spin off its oil pipeline business and focus on transporting natural gas, saying the businesses would be more valuable apart.
TC said it expected to complete the spinoff in the second half of 2024.
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Calgary, Alberta-based TC previously disclosed plans to sell assets this year to reduce debt and fund its other projects such as the Coastal GasLink pipeline in British Columbia, which is grappling with major cost overruns. On Monday it said it would divest a 40% interest in its Columbia Gas Transmission and Columbia Gulf Transmission pipelines for C$5.2 billion ($3.95 billion) to Global Infrastructure Partners (GIP).
TC's liquids business is best known for its Keystone pipeline, an oil conduit from Alberta to U.S. refineries that leaked in Kansas late last year.
TC CEO Francois Poirier said in a statement the split would generate greater shareholder value by allowing each company to focus on its own growth and operations, while stabilizing TC's balance sheet. The company decided on the spinoff after a two-year review.
Along with natural gas, TC's business will include its interests in power generation and energy storage, along with projects related to the energy transition such as carbon transportation and hydrogen.
Bevin Wirzba, currently executive vice-president of TC's Canadian natural gas and liquids pipelines, will be CEO of the liquids company.
TC also reported adjusted second-quarter profit of C$1 billion ($756.32 million) or 96 Canadian cents per share, compared to C$1 billion or C$1 per share a year earlier.
Analysts expected on average earnings per share of 95 Canadian cents, according to Refinitiv.
The company said its Coastal GasLink project is 91% complete.