TransCanada will buy the Houston-based, Columbia Pipeline Group (CPG), a large natural gas pipeline company, for $10.2b, wrote Fortune, to build up a gas pipeline system that will link up with TransCanada’s existing assets and create a 9,173 km network spanning the continent. The deal is valued at $13b in total, including debt.
TransCanada will finance the deal by selling its US Northeast merchant power assets and a minority interest in its Mexican natural gas pipeline business. It said it had also secured $10.3b of credit facilities.
CPG owns and operates about 24,140 km of natural gas pipelines, connecting the US Gulf Coast to the Midwest, Mid-Atlantic, and Northeast of US, home to some of the country’s most prolific shale gas plays.
“This acquisition represents a rare opportunity to invest in an extensive competitively positioned growing network of regulated natural gas pipeline and storage assets in the Marcellus and Utica regions of the United States,” TransCanada CEO, Russ Girling, said.
The deal comes months after TransCanada’s hopes for cutting an enormous tar-sands oil pipeline across North America were dashed in February 2015, as US President Barack Obama had blocked the cross-border Keystone XL crude pipeline project. His decision was a victory for environmentalists and a blow to TransCanada after a seven-year battle for approval, as Grist informed.
