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TC Energy (TRP) Plans a Stake Sale in NGTL to Indigenous Groups

TC Energy Corporation (TRP) filed to obtain regulatory approval for a move that would allow it to sell a stake in its Nova Gas Transmission Ltd. (“NGTL”) System in Western Canada, potentially to indigenous groups, per a Bloomberg report.

In order to facilitate a possible future minority ownership of the system, including participation from indigenous groups, the pipeline operator TRP applied to the Canada Energy Regulator to transfer ownership of the NGTL system from one corporate entity to another.

The Western Canadian Sedimentary Basin, which produces the majority of the natural gas in Western Canada, is linked to domestic and international markets through the NGTL system.

After suffering cost overruns on the Coastal GasLink pipeline project, TC Energy has been selling assets to reduce debt and accelerate its deleveraging process. The Coastal GasLink pipeline project is expected to supply to Canada’s first major liquefied natural gas plant.

The company also announced a divestiture of its oil pipelines division last month and reached an agreement to sell its 40% share in two U.S. natural gas pipeline networks for $3.9 billion (C$5.2 billion).

TC Energy seeks a ruling on the application by Nov 1, in order to facilitate a reorganization by Jan 1.

Zacks Rank & Key Picks

TC Energy currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy sector are USA Compression Partners, LP USAC, currently sporting a Zacks Rank #1 (Strong Buy), and Global Partners GLP and Evolution Petroleum Corporation EPM, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

USA Compression Partners is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. USAC has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 30 days.

Global Partners is a Delaware limited partnership, formed by affiliates of the Slifka family. The partnership owns, controls or has access to one of the largest terminal networks of refined petroleum products in New England. GLP is one of the largest wholesale distributors of distillates. It has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 30 days.

Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields, and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2024 in the past 60 days.

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