TransCanada to acquire Columbia Pipeline Group in the US for $13bn

TransCanada has signed an agreement to acquire US-based Columbia Pipeline Group in a transaction worth $13bn.

Columbia Pipeline Group operates a 24,000km network of interstate natural gas pipelines extending from New York to the Gulf of Mexico.

TransCanada president Russ Girling said: "The acquisition represents a rare opportunity to invest in an extensive, competitivelypositioned, growing network of regulated natural gas pipeline and storage assets in the Marcellus and Utica shale gas regions.

"The assets complement our existing North American footprint, which together will create a 91,000km natural gas pipeline system connecting the most prolific supply basins to premium markets across the continent."

The acquisition will also allow the company to transport natural gas supply in North America to liquefied natural gas terminals for export to markets worldwide.

Assets owned by Columbia Pipeline Group include Columbia Gas Transmission and Columbia Gulf Transmission.

Columbia Gas Transmission operates 18,000km of pipelines and 286 billion ft³ of storage capacity in the Marcellus and Utica shale production areas. The 5,400km Columbia Gulf Transmission pipeline system extends from Appalachia to the Gulf Coast.

The company is currently developing $5.6bn of commercially secure projects that are expected to generate growth in earnings as they enter service.

The company also plans to implement $1.7bn of modernisation initiatives through to 2021.

Girling added: "With a combined portfolio of $23bn in near-term projects secured by cost of service regulation or long-term contracts, we are well positioned to generate significant growth in earnings into the next decade."

The acquisition is subject to certain regulatory and government approvals and is expected to close in the second half of this year.

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Image: TransCanada Tower, the company’s head office in Calgary. Photo: courtesy of Qyd.