Phase-change slurry is a promising fluid for a district heating and cooling system. In this work, hydrodynamics and heat transfer characteristics of drag reducing trimethylolethane (TME: CH₃C(CH₂OH)₃) solution and suspension by cationic surfactant were studied. Oleyl bishydroxyethyl methyl ammonium chloride (trade name: Ethoquad O/12) was used as the surfactant, while sodium salicylate (NaSal) as counter-ion. Two kinds of experiments were conducted, namely pressure drop/friction factor and heat transfer measurements. From friction factor measurements, it is found that surfactant can induce drag reduction (DR) in TME solution/suspension. It is also found that TME molecule reduces the DR capability. From heat transfer measurement, it is found that surfactant induces heat transfer reduction (HTR) in TME solution and suspension. It is also revealed that Colburn analogy cannot be applied for TME suspension or drag-reducing TME solution and suspension. By using a correction factor for the Colburn analogy, application of the analogy for the drag-reducing TME solution is improved. At low velocity, HTR is higher than the DR, but at high velocity (just before DR is lost) both HTR and DR are nearly the same.