KKR and AIMCo adjusting their partnership terms and related agreements for their $11.2B equity investment in the Coastal GasLink Pipeline
In a significant development for the energy sector, key parties involved in the Coastal GasLink Pipeline Project have announced amendments to their project agreements.
The amendments, which address and resolve disputes over certain incurred and anticipated costs of the project, have been made between Coastal GasLink Pipeline Limited Partnership (CGPLP), TransCanada PipeLines Limited (TCPL), and KKR and Alberta Investment Management Corporation (AIMCo).
As part of these amendments, TCPL has committed to making an equity contribution of approximately $1.9 billion to CGPLP in connection with a settlement between CGPLP, TCPL, and LNG Canada Development Inc. (LNG Canada). This contribution is in addition to the existing project-level credit facilities, which have been increased by $1.6 billion, up to a total of $8.4 billion.
The revised cost estimate for the project now stands at $14.5 billion, a significant increase from the previous estimate of $6.6 billion. This increase in cost is likely to be absorbed by the parties involved, given the amendments to the project agreements.
Hoskin & Harcourt LLP, a leading Canadian law firm, advised KKR and AIMCo in their equity investment with CGPLP. Craig Spurn, Aqeel Virk, Heidi Wong, Neal Ross, Michael Pede, Ian Clarke, Colena Der, and Martha Martindale were part of the Hoskin & Harcourt LLP team that worked on this project.
It is important to note that in 2020, Hoskin & Harcourt LLP acted for KKR and AIMCo in their acquisition of a 65% equity interest in CGPLP from TCPL. This acquisition marked a significant milestone for the project, with KKR and AIMCo becoming major stakeholders.
KKR, a leading global investment firm, manages approximately US $500 billion in assets. AIMCo, on the other hand, is one of Canada's largest and most diversified institutional investment managers, responsible for the investments of pension, endowment, and government funds in Alberta.
These amendments to the project agreements are a testament to the ongoing commitment of the parties involved in the Coastal GasLink Pipeline Project to its successful completion. The project, which is expected to create thousands of jobs and contribute significantly to Canada's energy sector, is set to move forward with renewed momentum.
As always, Hoskin & Harcourt LLP remains committed to supporting its clients in their complex and significant transactions, and looks forward to the continued success of the Coastal GasLink Pipeline Project.
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