TC Energy could fleece the United States for as much as $15 billion if it wins the legacy NAFTA complaint it has brought to the World Bank’s International Centre for Settlement of Investment Disputes challenging the United States’ cancellation of the Keystone XL tar sands oil pipeline.
But some investment analysts say TC Energy may try to raise some honest cash by selling the existing Keystone pipeline that ships over 600,000 barrels a day of gunky Alberta oil across East River to Patoka, Illinois, and Cushing, Oklahoma:
The Canadian company may look to monetize its liquids pipelines as well as smaller gas pipelines with targeted proceeds of as much as $4 billion, RBC Capital Markets analyst Robert Kwan said in a note Monday, citing a recent meeting with TC’s chief financial officer Joel Hunter.
Separately, Tudor Pickering & Co. analysts said they see the possibility of the company shoring up its balance sheet with asset sales. A sale of the liquids pipeline would be an “ESG-accretive divestiture” and “the major prize in right-sizing the balance sheet,” analyst Matthew Taylor said in a note Tuesday, upgrading his rating on the stock to buy from hold.
TC Energy declined to comment, saying in an email that it doesn’t comment on rumours or speculation [Geoffrey Morgan and Robert Tuttle, “TC Energy Could Sell Keystone Pipeline to Fund Other Projects, Analysts Say,” Bloomberg, 2022.10.18].
Hey, fellow hippies! If TC Energy puts Keystone on the market, perhaps we could pool our resources, put up a billion or two to buy Keystone, and then turn off the tap, ending the shipment of tar sands oil beneath the prairie and sparing our landowners and prairie potholes of any further danger from Canadian oil spills!
Divesting on ESG reasons leads to a restricted investment universe and the potential to miss out on returns if those areas that are being avoided rally. i.e. Trump returns to his throne.
There’s a good deal (billions of dollars) of investment in natural gas transmission from Canada that goes along with the building of these new pipelines from the far north to American markets. TC Energy may be seeking to scale back on oil transmission to concentrate on new natural gas infrastructure. The whole pipeline business is very interesting from an investment standpoint. It’s either pipelines or railroads. The other alternative is freezing in the dark waiting for massive solar and other alternatives to come on line.