(Calgary) TC Energy has announced that its sale agreement to a consortium of Indigenous communities has been delayed.
In this agreement, the company committed to selling a minority stake in its Western Canadian natural gas transmission network to the communities.
The $1 billion deal, announced in July, will give 72 Indigenous communities a 5.34 per cent stake in its Nova Gas Transmission System (NGTL) and Foothills pipeline assets, which comprise a combined 25,000 kilometres of natural gas infrastructure.
The Calgary-based pipeline company said the deal was being delayed “due to a transaction structuring issue identified within the NGTL partnership.”
TC Energy said it was working to ensure the transaction “provides meaningful distributions to Indigenous communities while preserving the fundamental value” of the assets involved.
Bloomberg News reported Monday that a $1 billion bond deal to finance the deal did not close as expected.
The agreement was supported by Alberta Indigenous Opportunities (AIOC) and negotiated by a committee representing Indigenous communities in Alberta, British Columbia and Saskatchewan.
AIOC is an Alberta Crown corporation that was established in 2019 and provides loan guarantees ranging from $20 million to $250 million for eligible projects. In the case of the agreement with TC Energy, AIOC is providing communities with a $1 billion loan guarantee to support the new Indigenous-owned investment partnership.
The AIOC referred all questions Tuesday to TC Energy. A spokesperson for Alberta Indigenous Relations Minister Rick Wilson said while the Alberta government is aware of the delay, it is also referring all questions to TC Energy.
Representatives for the indigenous consortium did not respond to a request for comment.
When the deal was announced in July, it was hailed by politicians, Indigenous and business leaders as a game-changer.
Including debt, the total value of the agreement is $1.65 billion, making it the largest Indigenous participation agreement ever concluded in Canada.
“Imagine if we – Canada, our industry, our company TC Energy – had taken this approach decades ago,” said François Poirier, President and CEO of TC Energy at the time.
“Imagine what we could have accomplished, what we could have built together and how many benefits would have been created for Indigenous communities.”
“An unprecedented number of Indigenous communities in Alberta, Saskatchewan and British Columbia have already expressed interest in being part of this partnership,” Alberta Premier Danielle Smith said at the time.
“This is a clear demonstration that many Indigenous people support our energy industry – they want to be a part of it.”
The sale of a stake in the NGTL network is also intended to help TC Energy repay part of its debt.
The company said Tuesday it remains focused on developing a transaction that “provides meaningful distributions to Indigenous communities while preserving the fundamental value of the NGTL system and Foothills pipeline assets.”
The company will continue to provide important updates as they become available, TC Energy said.