TC Energy splitting into two companies by spinning off crude oil pipelines business

financialpost.com:

CALGARY — TC Energy Corp. has announced plans to split into two separate companies by spinning off its crude oil pipelines business.

The Calgary-based pipeline giant made the announcement — which it called “transformational” — after the close of markets on July 27, one day before its scheduled conference call to discuss the company’s second-quarter earnings.

The transaction will be completed on a tax-free basis, according to the company, and will result in the creation of two publicly traded companies. TC Energy will look more like a utility company, with a focus on natural gas infrastructure as well as nuclear, pumped hydro energy storage and new low-carbon energy opportunities.

The new liquids pipeline business will be headquartered in Calgary with an office in Houston. It will focus on enhancing the value of the company’s existing 4,900 kilometres of crude oil pipelines, including the critical Keystone pipeline system which transports oil from Alberta to refining markets in the U.S. Midwest and U.S. Gulf Coast.

TC Energy chief executive Francois Poirier said the company’s board of directors has approved the plan, which comes as the result of a two-year strategic review.

Poirier said now, more than ever, it’s apparent that all types of energy are required to meet global demand. While TC Energy has its fingers in many different pies, from natural gas delivery to crude oil transport to nuclear through its part ownership of Ontario’s Bruce Power, the company said separating its lines of business would allow for faster growth.

“When we took a step back and looked at all the opportunity we had in all of our franchises, it was way more than we could … pursue as one company, given our financial and human capacity,” Poirier