The project includes construction of 670km long natural gas pipeline and associated facilities in British Columbia, Canada with an expected cost of CAD $6.6bn ($5.04bn)
US-based investment firm KKR and Alberta Investment Management Corporation (AIMCo) have agreed to acquire a 65% stake in the Coastal GasLink pipeline project from TC Energy.
The project includes the construction of 670km long natural gas pipeline and associated facilities in British Columbia, Canada with an expected cost of CAD $6.6bn ($5.04bn).
It is being developed by LNG Canada, a consortium comprised of Shell (40%), PETRONAS (25%), PetroChina (15%), Mitsubishi Corporation (15%), KOGAS (5%).
The pipeline will supply natural gas from the Dawson Creek area in northern British Columbia to the LNG Canada liquefaction and export facility which is being constructed in Kitimat, where the gas will be converted into a liquefied state to export to the global markets.
Upon completion, the pipeline is expected to have an initial capacity of about 2.1 billion cubic feet of natural gas a day.
Construction activities have already started on the initial phase of the project with the completion targeted for early 2023.
The second phase of the pipeline, if sanctioned, is expected to increase the capacity of the pipeline to five billion cubic feet of natural gas per day.
KKR North American Infrastructure member and head Brandon Freiman said: “Coastal GasLink represents our third investment in infrastructure supporting Canada’s natural gas industry.
“We believe the export of Canadian natural gas to global markets will deliver significant benefits for the Canadian economy and local communities in Western Canada, and enable meaningful progress toward reducing global emissions.”
TC Energy will own 35% stake in Coastal GasLink
The consortium of LNG Canada has also signed a 25 year Transportation Service Agreements for the project.
KKR is making the investment in the pipeline project through a separately managed infrastructure account in partnership with the National Pension Service of Korea (NPS).
Upon completion of the transaction, TC Energy will own a 35% limited partnership equity interest in Coastal GasLink and will retain control of the general partner.