TC Energy Corp. has applied for regulatory approval for a potential minority interest sale of its Nova Gas Transmission Ltd. (NGTL) system, one that could include possible participation from Indigenous groups.

No transaction has been announced, but in its application dated Aug. 18, the Calgary-based pipeline company said it wants to complete a restructuring in order to facilitate potential future minority ownership of the system.

TC Energy’s NGTL system transports natural gas production from Alberta and northeast B.C. to domestic and export markets. It spans 24,631 km and connects with TC Energy’s Canadian Mainline system, Foothills system and other third-party pipelines.

In its application to the Canada Energy Regulator, TC Energy asks for a decision from the commission by Nov. 1, to support closing of the reorganization on Jan. 1, 2024.

CIBC analyst Robert Catellier said in a note to clients that TC Energy’s move with respect to NGTL is somewhat surprising. While the company has been open about its plan to divest assets in order to pay down debt and pave the way for future growth projects, the NGTL system wasn’t on observers’ radar.

“We had previously believed the NGTL system was unlikely to be sold due to its highly stable, low-risk business profile,” Catellier said.

“There is still a lot of uncertainty regarding whether a sale will be concluded at all, let alone at what valuation. Nevertheless, an NGTL sale could generate considerable interest given the low-risk profile.”

TC Energy has been under scrutiny by analysts and credit rating services this year for its significant debt load as well as for cost overruns on the Coastal GasLink project, which is currently nearing completion in B.C.

The projected cost of that project has grown to $14.5 billion, up significantly from a previous estimate of $11.2 billion and more than double the initial cost estimate of $6.2 billion.

Last month, the company announced it would sell off a 40 per cent stake in its Columbia Gas Transmission and Columbia Gulf Transmission systems to New York City-based Global Infrastructure Partners for $5.2 billion.

CEO Francois Poirier has said he hopes to achieve an additional $3 billion in divestitures between now and the end of 2024.

TC Energy also recently announced plans to split into two separate companies by spinning off its crude oil pipelines business. A shareholder vote on that transaction won’t be held until mid-2024.