TC Energy: Coastal GasLink Project’s Costs Continue to Rise

TC Energy Corp. anticipates a “material increase” in the price for the Coastal GasLink pipeline development.

In a presentation to investors on Tuesday, the Calgary-based pipeline corporation detailed the considerable cost pressures it is experiencing in Western Canada as a result of costs, shortages of qualified labour, contractor underperformance, and contractor disputes.

Other unplanned circumstances, such as drought and erosion and sediment control issues, have also affected the project.

TC Energy did not provide a monetary estimate for the cost overruns, however, the company did say that it plans to release a revised capital cost estimate that includes the latest developments early in the new year.

To help reduce some of the growing expenses, TC Energy CEO Francois Poirier announced that the company is considering potential recovery from contractors. However, these efforts may not be completed until after the project is finished.

Despite the rising cost, Poirier assured investors that TC Energy would still be able to meet its debt reduction goal by the end of 2023.

“Although Phase 1 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 percent or our ability to accelerate our deleveraging target from 2026,” stated Poirier.

Original source material for this article taken from here