TC Energy has agreed to sell a 40% stake in the Columbia Gas Transmission and Columbia Gulf Transmission pipeline systems in the US to Global Infrastructure Partners (GIP) for C$5.2bn ($3.9bn) in an all-cash deal.

Spanning over 24,140km, the Columbia Gas and Columbia Gulf pipelines are supported by long-term natural gas fundamentals as well as a rate-regulated commercial framework.

The two midstream assets are said to meet a significant portion of the daily natural gas demand in the US. This includes nearly 20% of the export supply of US liquified natural gas (LNG).

Extending from New York state to the Midwest and Southeast, the Columbia Gas Transmission system was acquired by TC Energy in 2016. The 18,768km long pipeline system covers 10 states to deliver natural gas across the US East, Midwest, and Southeast.

The Columbia Gulf Transmission pipeline, which is 5,419km in length is said to link to almost all the key pipelines in the US Gulf Coast as well as to additional Midwestern lines.

TC Energy president and CEO François Poirier said: “Today’s announcement represents a major milestone in achieving our 2023 strategic priorities. To date, we have advanced our deleveraging goals by delivering on our C$5+ billion asset divestiture programme ahead of our year-end target, while maximising the value of our assets and safely executing major projects, such as Coastal GasLink and Southeast Gateway.

“As part of our ongoing capital rotation program, we continue to evaluate opportunities to further our deleveraging objectives and optimally fund our secured capital programme.”

As part of the transaction, Columbia Pipeline Group (CPG) will transfer all its equity interests in its wholly-owned subsidiaries, Columbia Gas Transmission and Columbia Gulf Transmission, to a newly established entity called Columbia Pipelines Operating (CPOC).

The new entity, CPOC, will be owned entirely by another newly formed entity named Columbia Pipelines Holding Company (CPHC), which will serve as the ownership vehicle for TC Energy and GIP.

TC Energy will continue to be the operator of the two pipeline systems. Along with GIP, the company will invest in yearly maintenance, modernisation, and sanctioned growth capital to further boost the capacity and reliability of the pipeline networks.

GIP chairman and CEO Bayo Ogunlesi said: “We are pleased to partner with TC Energy on energy infrastructure assets that are critical to the North American and global natural gas markets.

“We welcome the opportunity for this joint venture to leverage the combined assets and capabilities of TC Energy and GIP to serve growing market needs for cleaner fuels, energy security and energy affordability.”

The deal, which is subject to customary closing conditions, is anticipated to close in Q4 2023.