The terminus for the Coastal GasLink natural gas pipeline is seen at the LNG Canada export terminal in Kitimat, B.C., on Sept. 28, 2022.DARRYL DYCK/The Canadian Press
A deal touted as Canada’s largest equity purchase by an Indigenous partnership may not be completed as planned because of an undisclosed snag at TC Energy Corp. TRP-T, which had previously agreed to sell the minority stake in its Alberta gas pipeline network.
François Poirier, TC Energy’s chief executive officer, said on Tuesday that a deal with the partnership may take some form other than the $1-billion divestiture the company announced in July. The company had disclosed in September that the sale of the Nova Gas Transmission Ltd. and Foothills pipeline systems stake was delayed “due to an identified transaction structuring issue” at the pipeline ownership level.
“So we’re back to the drawing board and working very hard with the communities to come up with a solution, but it may come in a form that’s different from an outright equity ownership interest,” Mr. Poirier said on Tuesday in response to an analyst’s question at TC Energy’s analyst and investor day event. He did not elaborate on a potential new arrangement.
The consortium of buyers comprises 72 Indigenous communities in Alberta, British Columbia and Saskatchewan seeking long-term economic benefits for their people. It was one of a number of recent agreements aimed at giving First Nations, Métis and Inuit more control over major industrial projects that cut through their territories.
Alberta Indigenous Opportunities Corp., a provincial Crown corporation, agreed to provide the partnership with a $1-billion equity loan guarantee.
Lee Thom, a councillor with the Kikino Métis Settlement in northeastern Alberta, said discussions between the consortium’s negotiating committee and TC Energy have shifted toward a new arrangement, but that he is restricted in his ability to provide details given the current sensitivity of the situation.
”That’s the offer. It’s something other than an equity sale,” Mr. Thom told The Globe and Mail. “It’s a new deal, but nothing is official yet until our consortium does some ground work. We’re at that point now where we’re doing our due diligence.”
He said he could not provide a timeline for a new arrangement.
The 25,000 kilometres of pipeline systems included in the proposal connects about 80 per cent of Western Canada natural gas production to domestic and export markets. The communities would share a minority interest of 5.34 per cent in the systems under the deal, which TC Energy originally expected to close in the third quarter of 2024.
During TC Energy’s third-quarter earnings call early this month, Mr. Poirier said the company still sees Indigenous participation as important, but said he had to limit his comments about the talks out of respect for the 72 communities.
During that call, chief financial officer Sean O’Donnell said the sale was not crucial to meeting the company’s debt-reduction target.
Mr. Poirier said on Tuesday the company has divested $7-billion of assets, and reduced capital expenditures, putting it on track to meet a year-end goal of reducing debt to 4.7 times its annual pre-tax operating earnings.