Energy infrastructure company TC Energy is selling a 313km natural gas pipeline in Mexico to ESENTIA Energy Development for C$560m (€348.4m).
The TSX and NYSE-listed firm said it has agreed to sell the entity that owns the Guadalajara-Manzanillo Pipeline as part of a capital allocation strategy to redeploy proceeds from mature assets towards “high-value growth opportunities across our North American footprint”.
Following the transaction, TC Energy will continue to own and operate its broader Mexican natural gas pipeline network, which spans approximately 3,300km of pipeline with capacity to transport 8.7bn cubic feet of natural gas per day.
The Guadalajara-Manzanillo Pipeline transports up to 500m cubic feet of natural gas per day, connecting imported LNG supply near Manzanillo and continental gas supply near Guadalajara to power plants and industrial customers across the states of Colima and Jalisco.
François Poirier, president and CEO of TC Energy, said: “This transaction reflects our continued focus on portfolio optimisation and long-term value creation. The transaction will support our disciplined capital allocation strategy, creating optionality to redeploy proceeds from a mature asset towards high-value growth opportunities across our North American footprint.
“With more than 30 years of history in Mexico, and as the largest Canadian investor in the country, TC Energy remains committed to reliably delivering the natural gas that supports the country’s expanding energy needs, strengthens energy security and enables future economic development.”
Daniel Bustos, ESENTIA Energy Development CEO, said: “The acquisition is consistent with ESENTIA’s strategy to build a cohesive cross-border transportation system through disciplined M&A and low-risk opportunities that capitalise on our existing infrastructure.
“The acquisition would expand ESENTIA’s ability to serve existing and prospective customers within the combined system’s area of influence, including demand from power generation, industrial customers and potential LNG-related projects, and help reinforce ESENTIA’s position as one of Mexico’s leading natural gas transportation platforms.”
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