Tidewater, TransAlta to offload Pioneer Pipeline to NGTL for $187m

Tidewater Midstream and Infrastructure and its partner TransAlta have agreed to sell the Pioneer Pipeline to NOVA Gas Transmission (NGTL), a fully-owned subsidiary of TC Energy, for CAD255 million ($187.37 million).

The Pioneer Pipeline is a 20 inch, 120 kilometer-long pipeline that connects the Brazeau River Complex of Tidewater to TransAlta’s generating units at Keephills along with an 11 kilometer long lateral to Sundance.

Throughput from the Pioneer Pipeline is nearly 130MMcf/d of natural gas. Proceeds of the deal will be equally split between Tidewater and TransAlta in accordance with their existing Pioneer Pipeline partnership.

Read more about NGTL acquisition of Pioneer Pipeline.

Additionally, Tidewater and TransAlta have agreed to terms under which, upon closing of the Pioneer Pipeline deal, TransAlta will pay Tidewater CAD10.5 million for some ancillary assets not included in the Pioneer Transaction, and for the closing of certain budgeted restoration work along the Pioneer Pipeline route that was delayed until this year because of weather.

Closing of the Pioneer Pipeline deal is subject to some customary conditions for a transaction of this nature including regulatory approval.

Tidewater plans to use the proceeds from the sale to speed up its deleveraging plan and repay debt under its credit facilities.