Gas pipeline’s cost has soared to $10.9 billion, TC Energy says

Costal GasLink pipeline Source Coastal GasLink

The price tag for TC Energy Corp.’s Coastal GasLink project has jumped to C$14.5 billion ($10.9 billion), as labour shortages and contractor disputes continue to plague a pipeline that will supply Canada’s first major liquefied natural gas export plant.

The cost could rise another C$1.2 billion if there are more delays that extend construction into 2024, the Canadian pipeline operator said Wednesday in a statement. Right now, the project is 83 per cent complete and the company expects to reach “mechanical completion” later this year.

The new estimate is more than double the original projected cost when the project was conceived. Calgary-based TC Energy warned of a major cost increase in November, but did not give a number at the time.

“We are disappointed with the increase in the Coastal GasLink Project costs,” Chief Executive Officer Francois Poirier said in the statement. “We continue to be laser-focused on safely completing this critical piece of energy infrastructure at the lowest possible cost.”

The pipeline, which will feed the Shell Plc-led LNG Canada plant on the British Columbia coast, has been delayed by a series of challenges including Covid-19, skilled worker shortages and protests by environmentalists. TC Energy will take an impairment charge on its Coastal GasLink investment when it reports fourth-quarter results.

© 2023 Bloomberg L.P.

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