TC Energy Completes Spinoff of Liquids Pipeline Firm South Bow

TC Energy Corporation has completed the spinoff of its Liquids Pipelines business into South Bow Corporation.

As a standalone entity, TC Energy is “positioned to achieve greater success by executing a tailored strategy to fully capture the incremental value of its unique opportunity set,” the company said in a statement.

“Today is a pivotal moment for TC Energy’s future, one that delivers progress on a strategic priority and our commitment to shareholders to maximize the value of our assets,” TC President and CEO François Poirier said. “We are uniquely positioned as a highly focused natural gas infrastructure and power and energy solutions company. We will continue to deliver enduring shareholder value, while playing a critical role in meeting growing industry and consumer demand for more secure, affordable and sustainable energy across North America and globally”.

“On behalf of TC Energy, I wish the team at South Bow all the best, and I am excited for the unique opportunities that lie ahead for them,” Poirier said. “Growing energy demand requires all forms of energy, and South Bow is well-placed to deliver resilient supply to the strongest demand markets in North America”.

South Bow describes itself as a liquids pipelines company that connects Canadian crude oil supply to the strongest demand and refining markets in the U.S. Midwest and Gulf Coast through its strategic corridor, high-quality contractual framework, and investment-grade financial position. The company operates 3,045 miles (4,900 kilometers) of crude oil pipeline infrastructure, connecting Alberta crude oil supplies to U.S. refining markets in Illinois, Oklahoma, and the U.S. Gulf Coast

South Bow said in a separate news release that it plans to “take a disciplined approach to capital allocation to deliver a compelling return to shareholders, prioritizing strengthening its financial position and pursuing low-risk, modest capital investments that enhance and expand its pre-capitalized corridor”.

The company added that it intends to pay a strong and sustainable base dividend that is underpinned by a stable cash flow profile.

“Today is an exciting day for South Bow as we start a new chapter of safely and reliably delivering energy and forging progress as a critical North American energy infrastructure company,” South Bow President and CEO Bevin Wirzba said. “We are confident that as a standalone, publicly traded company, we will unlock significant value from our unrivalled market position. Supported by strong business fundamentals and a robust backdrop for crude oil supply and demand, we are focused on creating long-term value for our customers, communities, employees, and shareholders.”

South Bow’s common shares will begin trading on the Toronto Stock Exchange (TSX) on Oct. 2, and are expected to commence trading on the New York Stock Exchange (NYSE) on or about Oct. 8, 2024, under the ticker symbol SOBO.

In July 2023, TC Energy announced plans to spin off its liquid pipelines business after a two-year strategic review, saying it could “better execute” business opportunities with two separate entities. In October 2023, it appointed industry leader Hal Kvisle as the Chair of the new liquids pipeline company’s board of directors.

Shareholders of TC Energy approved the spinoff of the liquids pipeline company in June.

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