TC Energy Corp. announced a strategic alliance with Mexico’s state-owned utility company Comisión Federal de Electricidad (CFE) with a focus on creating natural gas infrastructure in Mexico.
In a press release Thursday, the Canadian-based TC Energy said one of the joint projects includes developing and constructing the TGNH Southeast Gateway Pipeline for US$4.5 billion, which will supply natural gas to central and south regions of Mexico.
The offline pipeline will span 715-kilometer and TC Energy anticipates the project to be finished by mid-2025.
This deal comes over three years after TC Energy dropped Canada from its name, with the business previously called TransCanada Corp.
Some analysts suggested this was a strategic move for the Calgary-based energy infrastructure company to distance itself from Canada.
$1.8B SHARE DEAL
To help fund the deal, TC Energy is raising $1.8 billion in a bought-deal offering of 28.4 million common shares at a price of $63.50 apiece.
In a press release, TC Energy said the proceeds of the bought-deal offering will be used to help fund costs with the Southeast Gateway Pipeline, but could also be used to reduce debt or for short-term investments.
At 1:50 p.m. EDT on Friday, shares were down 3.41 per cent, at $63.40.
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