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TC Energy completes sale of Coastal GasLink stake
BRITISH COLUMBIA
Around 35% of the pipe for Coastal GasLink had been stockpiled as of early May.
CANADA’S TC Energy has completed the sale of a 65% stake in the Coastal GasLink pipeline, which it is building in British Columbia. The pipeline, which has encountered opposition from the hereditary chiefs of a local First Nation that sparked broader protests across Canada ear- lier this year, will connect shale fields in north- east BC to the LNG Canada project, which is also under construction.
The buyer is a joint venture between private equity firm KKR & Co. and Alberta Investment Management Corp. (AIMCo.). TC Energy remains responsible for constructing and oper- ating the CAD6.6bn ($4.8bn) pipeline.
TC Energy said at the beginning of this month, in its first-quarter earnings, that it had continued to advance construction on the pro- ject, as well as funding plans for it, during the quarter.
As part of this, on April 28, a credit agreement was executed with a syndicate of banks extending non-recourse project-level financing to fund the majority of the construction costs of the pipeline. TC Energy noted that the credit facilities under
this agreement would be available to be drawn once certain conditions had been met, includ- ing the closing of the transaction with KKR and AIMCo. Draws on these facilities will reduce the partner contributions required to fund the pro- ject, the company added.
TC Energy also said in its first-quarter results that it would provide an option for 20 First Nations along the pipeline’s route to acquire a 10% equity stake in Coastal GasLink. Any such transaction would be based on terms similar to those it has agreed with KKR and AIMCo.
As of early May, around 75% of clearing along the pipeline’s route had been completed and roughly 35% of pipe had been stockpiled. This marked the completion of major work for the winter season, with crews waiting to remobilise following Canada’s spring breakup.
TC Energy noted previously that while measures to contain the coronavirus (COVID- 19) could have an impact on the schedule for Coastal GasLink, the extent of this remains uncertain for now.
Enbridge seeks rate increase on oil pipelines
NORTH AMERICA
CALGARY-BASED Enbridge has proposed raising the tariff rates on its Express crude pipe- line, which runs from the Canadian border in Alberta to points in Montana and Wyoming, by 3%.
In a May 26 filing with the US Federal Energy Regulatory Commission (FERC), Enbridge said committed rates on the Express pipeline would be raised from July 1. In a separate filing, it sought to raise the rates on the Platte pipeline between Wyoming and Illinois to the ceiling rates as established under FERC methodology.
The 785-mile (1263-km) Express pipeline carries up to 280,000 barrels per day (bpd) of crude from Alberta to Casper, Wyoming, for use by refiners in the Rocky Mountain states. The oil delivered through the pipeline comprises a mix of light, medium and heavy crude grades.
The 933-mile (1,502-km) Platte pipeline transports up to 164,000 bpd of crude oil from Casper to Guernsey, also in Wyoming, and 145,000 bpd from Guernsey to Wood River, Illinois.
The proposed rate increases come as Enbridge remains embroiled in a dispute north of the border with some of the shippers on its Mainline system, which carries Western Cana- dian crude from Alberta to the Canadian border for onward shipment on other pipelines. The company is proposing overhauling the way it contracts capacity on the Mainline, but this is opposed by some of the shippers. The Canada Energy Regulator (CER) said last week that the regulatory process relating to Enbridge’s applica- tion would proceed under a single-phase hear- ing. It did not specify when the hearing would take place.
Throughput on the Mainline, which has a capacity of around 3mn bpd, was down by about 400,000 bpd in April as the coronavi- rus (COVID-19) pandemic hit oil demand. Enbridge’s CEO, Al Monaco, warned earlier this month that it was likely to drop further by an average of 400,000-600,000 bpd in the sec- ond quarter following supply cuts by Cana- dian producers.
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