The sale proceeds will be divided equally between Tidewater and TransAlta pursuant to their existing Pioneer Pipeline partnership
Tidewater Midstream and Infrastructure and its partner TransAlta have signed a definitive agreement with TC Energy’s subsidiary NOVA Gas Transmission (NGTL) to sell the Pioneer Pipeline for $255m.
Located within Alberta, the pipeline runs from west of Drayton Valley to west of Edmonton.
The Pioneer Pipeline is a 20 inch, 120km pipeline that connects Tidewater’s Brazeau River Complex to TransAlta’s generating units at Keephills along with an 11km lateral to Sundance. The throughput from the Pioneer Pipeline is around 130MMcf/d of natural gas.
Tidewater said that the sale proceeds will be divided equally between Tidewater and TransAlta pursuant to their existing Pioneer Pipeline partnership.
Tidewater to use the sale proceeds to repay debt
Upon completion of the the Pioneer transaction, TransAlta will pay certain amount for some assets that are not included in the deal.
Under the agreed terms, Tidewater is expected to receive $10.5m for certain ancillary assets that are not part Pioneer transaction as well as for completion of some budgeted restoration work along the Pioneer Pipeline route.
The completion of the transaction is subject to certain customary conditions including regulatory approval.
Furthermore, the proceeds from the sale will be used by Tidewater to speed up its deleveraging plan and to repay debt under its credit facilities.