Pipeline operator TC Energy looks to sell C$5 bln of assets next year

North American oil and gas pipeline company TC Energy Corp (TRP.TO) said on Wednesday it was looking to sell C$5 billion ($3.7 billion) worth of assets to repay debt and fund new projects, and reported an 8% rise in quarterly profit.

Canada, the world’s fourth-largest crude producer, has been seeking ways to boost pipeline utilization following Russia’s invasion of Ukraine, which has strained global oil and natural gas supplies.

TC Energy Chief Executive Francois Poirier said the company planned to raise more than C$5 billion through 2023 from selling assets and minority interests.

He said the company also intended to approve C$5 billion worth of projects annually throughout the decade.

The asset sales plans are bigger than previously expected, and TC now may reach its goal of reducing debt to less than five times earnings before interest, taxes, depreciation and amortization (EBITDA) two years early, in 2024, Tudor Pickering Holt analyst Matthew Taylor said.

TC shares rose 3.2% in Toronto.

Poirier told analysts on a call that he would not provide details about what assets TC may sell, but said the company would consider future greenhouse gas emissions in the sales. Infrastructure with stable cash flows and long-term contracts are in strong demand and discussions with potential buyers are ongoing, he said.

Among its projects, TC is building the C$11.2 billion Coastal GasLink pipeline to supply Shell PLC-led (SHEL.L) LNG Canada’s liquefied natural gas export terminal in British Columbia by 2025.

Earnings from TC’s Canadian natural gas pipelines rose to C$409 million for the July-September quarter, from C$343 million a year earlier.

The Calgary-based company’s net income attributable to common shares stood at C$841 million, or 84 Canadian cents per share, for the quarter, from C$779 million, or 80 Canadian cents per share, a year earlier.

Rival Enbridge Inc (ENB.TO) also reported higher third-quarter adjusted profit on Friday.

($1 = 1.3440 Canadian dollars)