TransCanada has agreed to buy Houston-based Columbia Pipeline Group for US$13 billion that will give the Canadian firm access to a vast network of interstate natural gas pipelines in two of North America’s fastest-growing shale gas plays.
Columbia Pipeline operates 24,000 km natural gas pipelines extending from New York to the Gulf of Mexico, with a significant presence in the Appalachia production basin. Its assets include Columbia Gas Transmission, which operates approximately 18,000 km of pipelines and 286 billion cubic feet of storage capacity in the Marcellus and Utica shale production areas
The deal is subject to Columbia shareholder approval and certain regulatory approvals, which should be completed by the second half of 2016
"The acquisition represents a rare opportunity to invest in an extensive, competitively-positioned, growing network of regulated natural gas pipeline and storage assets in the Marcellus and Utica shale gas regions," said Russ Girling, TransCanada's president and chief executive officer.
"This transaction delivers tremendous value to our shareholders and places Columbia Pipeline Group within a leading energy platform that can maximize the value of our strategic positioning and deep inventory of transformational growth projects," said Robert C. Skaggs, Jr., CPG's chairman and chief executive officer.
Going forward, TransCanada's $13.5 billion portfolio of near-term investment opportunities combined with Columbia's US$7.3 billion of commercially secured projects, gives a combined portfolio of $23 billion in near-term projects.