Canadian energy infrastructure group TransCanada has provided updates on a series of strategic initiatives, announcing the sale of power assets in the United States and a focus on the Mexican gas pipeline sector.
The group expects to realize approximately US$3.7bn from the monetization of its US Northeast Power business, through the sale of Ravenswood (2,480 MW, CCGT and fuel-fired power plant), Ironwood (778 MW, CCGT power plant), Ocean State Power (560 MW, CCGT power plant) and Kibby Wind (132 MW wind park) to Helix Generation (part of LS Power) for US$2.2bn and TC Hydro (583 MW hydropower complex in New Hampshire, Vermont and Massachusett) to Great River Hydro (ArcLight Capital Partners) for US$1.065bn. The remainder attributed to TransCanada's power marketing business is expected to be realized going forward. The two sale transactions are expected to close in the first half of 2017 subject to certain regulatory and other approvals and will include closing adjustments. Proceeds from these sales and future realization will be used to repay a portion of the US$6.9bn senior loan used to partially finance the Columbia Pipeline acquisition earlier in 2016.
TransCanada has decided not to sell a minority interest in six of gas pipelines in Mexico and will maintain its full ownership interest in these assets. TransCanada currently owns and operates the Guadalajara and Tamazunchale gas pipelines and is investing US$3.8bn to develop and complete construction of four additional pipelines plus fund its interest in the Sur de Texas project, all of which will serve growing demand in Mexico. All projects are expected to be in-service by the end of 2018 and are underpinned by 25-year take-or-pay contracts with the Comisión Federal de Electricidad (CFE).