TC Energy sees higher costs for Coastal Gaslink pipeline

TC Energy Corp said it expects costs for its Coastal Gaslink pipeline in British Columbia to rise compared to the previously disclosed estimate due to increased scope, permit delays and COVID-19 impacts.

The company, which also posted a 7.9% fall in third-quarter comparable profit, added it does not expect its future equity contributions in the project to increase significantly following the conclusion of cost review process.

The Coastal Gaslink pipeline, which will deliver natural gas from Montney to LNG Canada's liquefaction facility under construction near Kitimat, British Columbia, has faced opposition from environmentalists.

The construction of Coastal Gaslink was expected to cost over $6.6 billion, and once the pipeline was in operation, an additional $42 million was forecast to be spent each year.

TC Energy also reiterated that its controversial Keystone XL pipeline, which has been delayed for more than a decade due to opposition from landowners, environmental groups and tribes, would be placed in service in 2023.

It also said on Thursday it will move ahead with its $200 million Wisconsin Access Project to increase natural gas capacity on a segment of its ANR Pipeline system that transports fuel from various basins to the US Midwest and Gulf Coast. The project is targeted to be brought in service in the second half of 2022.

TC Energy's comparable earnings fell to C$893 million ($677.23 million), or 95 Canadian cents per share, in the third quarter ended Sept. 30, from C$970 million, or C$1.04 per share, a year earlier.

The decline was mainly due to lower spot volumes on the Keystone pipeline system, as well as reduced earnings from its power operations as a unit was removed from service and as its Ontario natural gas-fired power plants were sold in April.