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TC Energy could divest Keystone oil pipeline, analysts say

Geoffrey Morgan and Robert Tuttle, Bloomberg News

TC Energy Corp. could sell billions of dollars of assets to help fund projects in Mexico and Western Canada and may even seek the divestiture of its Keystone oil pipeline to the Gulf Coast, according to analysts.

The Canadian company may look to monetize its liquids pipelines as well as smaller gas pipelines with targeted proceeds of as much as $4 billion (US$2.9 billion), RBC Capital Markets analyst Robert Kwan said in a note Monday, citing a recent meeting with TC’s Chief Financial Officer Joel Hunter.

Separately, Tudor Pickering & Co. analysts said they see the possibility of the company shoring up its balance sheet with asset sales. A sale of the liquids pipeline would be an “ESG-accretive divestiture” and “the major prize in right-sizing the balance sheet,” analyst Matthew Taylor said in a note Tuesday, upgrading his rating on the stock to buy from hold. 

TC Energy declined to comment, saying in an email that it doesn’t comment on rumors or speculation.

The company has faced challenges in recent years including the cancellation of its expansion of the Keystone XL pipeline after U.S. President Joe Biden pulled a key permit for the project on his first day in office. The company has also experienced a 70 per cent cost overrun in the Coastal GasLink pipeline, which is being built to supply LNG Canada, a massive natural gas export project in British Columbia. TC’s stock price fell to a 19-month low in Toronto earlier this month.

The company is primarily focused on natural gas pipelines and power generation. It built the first phase of the 600,000-barrel-a-day Keystone pipeline system more than a decade ago. In recent years, concern about greenhouse gas emissions has prompted some investors to shun oil-sands assets.

TC Energy invests in renewable natural gas project at Jack Daniel distillery

The Canadian Press

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TC Energy Corp. says it will invest $29.3 million in a renewable natural gas production facility that will use a byproduct from the Jack Daniel Distillery in Lynchburg, Tenn.

TC Energy says once the facility owned by Lynchburg Renewable Fuels LLC is operational in 2024 it will break down the byproduct from the distilling process to generate methane gases recovered as biogas.

A biogas upgrade plant will remove contaminants to produce pipeline-quality renewable natural gas that will be connected to a local natural gas utility.

Liquid fertilizer will also be produced in the process.

The project is being developed by 3 Rivers Energy Partners LLC, which is an owner in Lynchburg Renewable Fuels.

TC Energy and 3 Rivers Energy Partners have also committed to jointly develop future renewable natural gas projects.

VERTICALLY INTEGRATED STATE

CIBC names former finance minister Morneau to board  

Kevin Orland, Bloomberg News   

Bill Morneau, Canada's minister of finance, speaks during a news conference in Ottawa, Ontario, Canada, on Friday, March 13, 2020. The Bank of Canada cut interest rates by half a percentage point in an emergency move to buffer the nation's economy from the double hit from the coronavirus and tanking oil prices. , Bloomberg

Canadian Imperial Bank of Commerce named former Finance Minister Bill Morneau to its board, adding one of Prime Minister Justin Trudeau’s most influential lieutenants from his first years in office. 

Morneau served as Trudeau’s finance chief after the Liberal Party swept to power in 2015. He resigned in 2020 amid a public rift with the prime minister over the government’s decision-making on COVID-19 programs. Before joining the government, Morneau led Morneau Shepell, a human resource and pension-services provider that was later renamed LifeWorks.

“Bill Morneau is an accomplished leader with extensive government, public policy and business experience along with strong international expertise,” CIBC Chair Kate Stevenson said in a statement Tuesday. Morneau joins the board on Nov. 1, the Toronto-based bank said.

Another former finance minister, John Manley, was on CIBC’s board for 16 years before retiring last year. 

After leaving office, Morneau entered the race to become secretary-general of the Organization for Economic Cooperation and Development but withdrew in January 2021, citing a lack of support.