TC Energy launches South Bow Corp. as an independent pipeline business Achi-News

TC Energy Corp. has completed its spin-off of South Bow Corp., its crude oil pipeline business, as an independent company.

The new company, which will be headquartered in Calgary with an office in Houston, will be led by Bevin Wirzba, former executive vice president of TC Energy’s natural gas and liquids pipeline business.

South Bow will run TC Energy’s crude oil pipeline business, including the key Keystone pipeline system.

The move is the result of a strategic review where the TC of Calgary considered its options including the possibility of selling the oil pipeline business.

Spinning off the oil pipeline business, which has long-term committed contracts with oil carriers, will give South Bow the opportunity to use its robust cash flow to pay down debt and improve shareholder returns, while TC Energy will become a company focused on growth on natural gas.

TC Energy – which has natural gas transportation infrastructure in Canada, the United States, and Mexico – supports the future of the commodity, particularly the potential for growth driven by demand for liquefied natural gas (LNG).

TC Energy also has plans to look at new low carbon energy opportunities such as nuclear energy storage and hydropower pumping.

The company has come under scrutiny from analysts and credit ratings for its significant debt load as well as for cost overruns on the Coastal GasLink pipeline project, due for completion in the fall of 2023.

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TC Energy shareholders voted in favor of the crude pipeline business outcome in a vote in June.

South Bow ordinary shares were issued on Tuesday to TC Energy shareholders of record on 25 September. Shareholders received one South Bow common share for every five TC Energy common shares owned.

South Bow common shares are expected to begin trading on the Toronto Stock Exchange on Wednesday under the ticker symbol SOBO. Trading on the New York Stock Exchange is expected to begin on or around October 8.

& copy 2024 The Canadian Press