TransCanada Locked in Negotiations For Reported Purchase of Columbia Pipeline Group

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TransCanada Locked in Negotiations For Reported Purchase of Columbia Pipeline Group

Mon, 03/14/2016 - 10:01
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Columbia Pipeline Group companies (© 2016 Columbia Pipeline Group)
Columbia Pipeline Group companies (© 2016 Columbia Pipeline Group)

TransCanada is reportedly in talks to acquire Columbia Pipeline Group in the United States in a deal worth $12 billion in total.

In expressing caution on the story making the rounds, TransCanada said that “while we are in discussions regarding a potential transaction with a third party, no agreement has been reached and there is no assurance that these discussions will continue or that any transaction will be agreed upon,” TransCanada said.

If carried out, the transaction would give TransCanada access to what some analysts suggest are high-growth U.S. shale plays.

“I think it makes good sense strategically, but everything has a price,” FirstEnergy Capital Corp. analyst Steven Paget said. He added that TransCanada is well-positioned in high-growth shale gas formations in northeastern Alberta and northwestern British Columbia with its existing gas pipeline network. Columbia’s gas pipeline system in Pennsylvania and the northeastern U.S. would give TransCanada exposure to another high-growth shale gas formation called the Marcellus.

TransCanada, the company behind the now defunct Keystone XL Oil Pipeline Project, also faced a setback this month when the Quebec government filed a motion for an injunction to ensure that its proposed Energy East pipeline complied with the province's environmental laws.

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