TC Energy Warns Coastal GasLink Pipeline Dispute Could Impact Construction
CALGARY, Alberta (Reuters) — Canadian pipeline operator TC Energy warned on Thursday that an ongoing dispute with LNG Canada over the cost of the Coastal GasLink pipeline in northern British Columbia will impact construction if it is not resolved soon.
TC is building Coastal GasLink to supply LNG Canada, the Royal Dutch Shell-led liquefied natural gas project in Kitimat, but work was delayed by the COVID-19 pandemic and costs are expected to increase. The cost was previously estimated at C$6.6 billion ($5.31 billion).
"We are in disagreement with LNG Canada over the alignment of cost and schedule and have been in discussion for some time now," Tracy Robinson, Coastal GasLink president told a TC earnings call. "They are progressing but if we're not able to reach a resolution in the near-term there will be some implications to our construction."
TC has 5000 people working on the pipeline corridor and said the project is nearly 50% complete. LNG Canada is due to start operating around 2025.
The Calgary-based company released second-quarter earnings that beat estimates for quarterly profit, as demand for its transport services returned with a rebound in crude prices.
Net income attributable to common shares rose to C$982 million, or C$1 per share, in the three months ended June 30, compared to a loss of C$1.06 billion, or C$1.11 per share, in the prior quarter.
In the first quarter TC had taken hit of C$2.2 billion in impairment charges related to the suspension of its Keystone XL pipeline after U.S. President Joe Biden revoked a key permit.
Its comparable earnings stood at C$1.05 billion, or C$1.07 per share. That beat estimates of 96 Canadian cents per share, according to Refinitiv IBES data.
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