TC Energy expects cost of Coastal GasLink pipeline project to rise
TC Energy Corp. is expecting what it calls a "material increase" in the cost of its Coastal GasLink pipeline project.
The Calgary-based pipeline company said in an investor presentation Tuesday that it is facing significant cost pressures in Western Canada related to labour costs and shortages of skilled labour, along with contractor underperformance and disputes.
The project has also been hurt by other unexpected events including drought conditions, and erosion and sediment control challenges, the company said.
TC Energy did not put a dollar value on the cost overruns, though it said it expects to provide an updated capital cost estimate early next year that will incorporate the recent developments.
It is the second time in a handful of months that TC Energy has flagged the rising costs of Coastal GasLink. In July, the company said it expected the cost of the project spanning northern British Columbia had risen to $11.2 billion compared with an earlier estimate of $6.6 billion.
The 670-kilometre pipeline, which aims to carry natural gas across the province to the LNG Canada processing and export facility in Kitimat, B.C., is 80 per cent complete.
TC Energy CEO François Poirier said the company is pursuing potential recoveries from contractors to offset a portion of the rising costs, though those efforts might not be concluded until after the project is completed.
The company still expects Coastal GasLink to be completed by the end of 2023, and Poirier said its escalating price tag won't keep TC Energy from achieving its debt reduction target.
“Although Phase One of Coastal GasLink has been challenged by cost performance, we do not expect any impact on the sustainability of our dividend growth rate of three to five per cent or our ability to accelerate our deleveraging target from 2026,” said Poirier in a news release.
The Coastal GasLink pipeline is not the only major energy infrastructure project in Canada to be plagued by cost overruns this year. In February, the company behind the ongoing Trans Mountain pipeline expansion project — which will increase oil transportation capacity from Alberta to the West Coast — announced the new cost of the project is an estimated $21.4 billion, up from an earlier estimate of $12.6 billion.
Trans Mountain Corp. blamed the surging cost projections for the project on the COVID-19 pandemic and the effects of the November 2021 flooding in B.C., as well as project enhancements, increased security costs, route changes to avoid culturally and environmentally sensitive areas, and scheduling pressures related to permitting processes and construction challenges in difficult terrain.
This report by The Canadian Press was first published Nov. 29, 2022.
CTVNews.ca Top Stories
Fluid in eye cells can 'boil' if you watch the eclipse without protection: expert
Millions of people in parts of Eastern and Atlantic Canada will be able to see the rare solar eclipse happening on April 8. But they should only look up if they have proper eye protection, experts say.
CRA no longer requiring 'bare trust' reporting in 2023 tax return
The Canada Revenue Agency announced Thursday it will not require 'bare trust' reporting from Canadians that it introduced for the 2024 tax season, just four days before the April 2 deadline.
NEW More unauthorized products for skin, sexual enhancement, recalled: Here are the recalls of this week
Health Canada and the Canadian Food Inspection Agency recalled various items this week, including torches, beef biltong and unauthorized products related to skin care and sexual enhancement.
Where is the worst place for allergy sufferers in Canada?
The spring allergy season has started early in many parts of Canada, with high levels of pollen in some cities already. Experts weigh in on which areas have it worse so far this season.
Do these exercises for core strength if you can't stomach doing planks
Planks are one of the most effective exercises for strengthening your midsection, as they target all of your major core muscles: the transverse abdominis, rectus abdominis, external obliques and internal obliques. Yet despite the popularity of various 10-minute plank challenges, planking is actually one of the most dreaded core exercises, according to many fitness experts.
Grandparent scam: London, Ont., senior beats fraudsters not once, but twice
It was a typical Tuesday for Mabel Beharrell, 84, until she got the call that would turn her world upside down. Her teenaged grandson was in trouble and needed her help.
Polar ice is melting and changing Earth's rotation. It's messing with time itself
One day in the next couple of years, everyone in the world will lose a second of their time. Exactly when that will happen is being influenced by humans, according to a new study, as melting polar ice alters the Earth’s rotation and changes time itself.
Sunshine list: These were the Ontario public sector's highest earners in 2023
Ontario released its annual sunshine list Thursday afternoon, noting that the largest year-over-year increases were in hospitals, municipalities, and post-secondary sectors.
NEW 'Godzilla x Kong: The New Empire': A crowd pleaser that turns it up to 11
Hot on the heels of last year's 'Godzilla Minus One' comes 'Godzilla x Kong: The New Empire,' the first ever Academy Award winner in the giant reptile's decades-long film career.