TC Energy Corp. has completed its spinoff of South Bow Corp., its crude oil pipelines business, as an independent company.
The new company, which will be headquartered in Calgary with an office in Houston, will be led by Bevin Wirzba, formerly the executive vice-president for TC Energy’s natural gas and liquids pipelines business.
South Bow will run TC Energy’s crude oil pipelines business, including the critical Keystone pipeline system.
The move is the result of a strategic review in which the Calgary-based TC considered its options including the potential sale of the oil pipelines business.
Spinning off the oil pipelines business, which has long-term committed contracts with oil shippers, will give South Bow the chance to use its robust cash flows to pay down debt and enhance shareholder returns, while TC Energy will become a growth-oriented company focused on natural gas.
TC Energy — which has natural gas transportation infrastructure in Canada, the U.S., and Mexico — is bullish on the future of the commodity, in particular the potential for growth spurred by demand for liquefied natural gas (LNG).
TC Energy also has plans to look at new, low-carbon energy opportunities such as nuclear and pumped hydro energy storage.
The company has been under scrutiny by analysts and credit ratings for its significant debt load as well as for cost overruns on the Coastal GasLink pipeline project, which was completed in the fall of 2023.
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TC Energy shareholders voted in favour of the spinoff of the crude pipelines business in a vote in June.
South Bow common shares were distributed Tuesday to TC Energy shareholders of record on Sept. 25. Shareholders received one South Bow common share for every five TC Energy common shares owned.
South Bow’s common shares are expected to start trading on the Toronto Stock Exchange on Wednesday under the ticker symbol SOBO. Trading on the New York Stock Exchange is expected to start on or about Oct. 8.