(Bloomberg) -- TC Energy Corp. plans to spin off its oil pipelines unit, helping it trim debt and shift its focus to faster-growing businesses that will benefit from the global energy transition.

François Poirier will stay as chief executive officer of TC Energy, which will operate natural gas pipelines and businesses such as nuclear generation and pumped hydropower energy storage, the Calgary-based company said Thursday. Bevin Wirzba, currently head of the Canadian gas and oil pipelines unit, will lead the new liquids business.

The split is the most significant transaction for TC Energy since it moved into the U.S. natural gas pipelines business with the roughly $10 billion purchase of Columbia Pipeline Group Inc. that was struck in 2016. The spinoff leaves TC Energy much more focused on the Columbia assets and hives off the oil pipelines — such as the Keystone system — that it owned before the transaction.

Splitting off the low-growth liquids business, and leveraging it “fairly substantially” provides significant benefits for TC Energy, Stephen Ellis, a sector strategist at Morningstar, said in an email.

“The most important is reduced leverage, given the debt heaped on the spinoff entity, but we’re now highlighting the growth at the core business better, while improving its sustainability profile,” Ellis said. “Gas, power and hydrogen look better than oil!”

TC Energy said the decision comes after a two-year strategic review and is expected to be completed on a tax-free basis in the second half of 2024. The company plans to seek shareholder approval of the deal at a meeting around the middle of next year.

TC Energy has struggled with cost overruns on its Coastal GasLink pipeline project in British Columbia that will connect to Canada’s first major liquefied natural gas plant. It also recently grappled with a massive oil spill in the US from its Keystone pipeline that has forced it to reduce rates on the system. TC Energy shares have slid 12% this year, compared with a 2.9% drop for the S&P/TSX energy index.

The company pledged to sell C$5 billion in assets by year end to address the cost issues, a goal achieved earlier this week with the agreement to sell a 40% stake in two US natural gas pipeline networks for $3.9 billion (C$5.2 billion) in cash. 

The new liquids pipelines company will focus on increasing capacity on underused portions of the system and increasing connectivity to new delivery points, the company said. 

(Updates with share performance in seventh paragraph. A previous version corrected the characterization of the deal in the third paragraph.)

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