TC Energy 'confident' it will complete $14.5-billion Coastal GasLink pipeline by year's end
Costs have more than doubled on the 670-kilometre natural gas pipeline and could increase up to a further $1.2 billion if construction is not completed this year.
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Despite construction challenges and ballooning costs on the Coastal GasLink pipeline that contributed to a $1.4 billion fourth-quarter loss reported Tuesday, TC Energy says it’s on track to complete construction this year on the project in northern B.C.
Costs have more than doubled on the 670-kilometre natural gas pipeline to $14.5 billion and could increase up to a further $1.2 billion if construction is not completed this year.
The company says it will have a better idea by the summer whether it will need to push construction into 2024. While 84 per cent of construction is complete, there are some remaining challenging areas such as river crossings that can only be undertaken during the winter months, Bevin Wirzba, TC Energy’s executive vice-president of strategy and corporate development, said Tuesday.
“We . . . are confident that we’ve incorporated not only cost but schedule risks into our execution plan to deliver the mechanical completion this year,” said Wirzba.
“That said, it’s a linear project with some very challenging activities. So, we made an allowance in the event that we’re not able to achieve the scope that we have planned this year . . . and there could be activities that extend into ‘24 and ‘25,” he said.
The pipeline will transport gas from northeast B.C. to LNG Canada’s $18 billion export plant being built near Kitimat on the north-central coast. The liquefied natural gas plant will compress gas to be loaded onto ships that will open up more efficient and faster overseas access to markets in Asia.
The controversial pipeline has been hit by attacks on construction sites and blockades and recently came under scrutiny by some hereditary chiefs and environmental groups for alleged harm to fish habitat from construction at river crossings.
Government agencies with regulatory oversight such as the B.C. Oil and Gas Commission and the federal department of Fisheries and Oceans have not found any compliances or harms to the environment on the river crossings.
But the B.C. Environmental Assessment Office, which also has oversight of the construction project, has fined the company three times for a total of $455,000 for erosion and sediment control problems. The EAO has said there have been recent improvements.
After the company’s financial results were released Tuesday, some Wet’suwet’en hereditary chiefs said the massive cost overruns and ongoing delays to construction — while continuing to violate Wet’suwet’en rights and title — also raised new doubts over the commercial viability of the project.
“The magnitude of how much the project went up in cost should tell the world how dangerous it is,” said Wet’suwet’en hereditary chief Na’moks, also known as John Risdale. “TC Energy investors and those who support it should also know the economic risk that comes with it.”
The nascent liquefied natural gas (LNG) export industry has support from some First Nations, including the Haisla in Kitimat. Elected councils of 20 First Nations along the pipeline route have signed community and project agreements with the company.
Despite the significant loss, TC Energy reported it is increasing its dividend to shareholders, noted its revenues continue to increase and it has new projects coming on stream that will put it in good financial position.
LNG Canada is also examining whether it will build a second phase to its project in Kitimat and Wirzba said Tuesday TC Energy could supply additional gas by adding six compressor stations on the pipeline.
He said additional pipeline capacity could also potentially supply the Haisla-led Cedar LNG project that is working through an environmental assessment.
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