CALGARY — TC Energy Corp. posted a lower quarterly profit as its Coastal GasLink project reached a “significant milestone.”
The Calgary-based energy producer said its net income attributable to shareholders was $889 million or 90 cents per diluted share in the second quarter, down from $975 million or $1 per share a year earlier.
The pipeline operator’s comparable earnings were $979 million or $1 per common share, down from $1.04 billion or $1.06 per share in the same period of 2021.
Revenue for the three months ended June 30 increased to $3.64 billion from $3.18 billion during the same quarter last year.
TC Energy’s chief executive Francois Poirier said the pipeline company has reached a “significant milestone” with Coastal GasLink LP, signing revised agreements with LNG Canada that factors in a new cost estimate of $11.2-billion — up from $6.6 billion — for the liquified natural gas pipeline.
The 670-kilometre pipeline, which is about 70 per cent complete, according to Poirier, will connect BC’s shale gas resources to LNG Canada’s export project in Kitimat. Once there, the gas will be converted into liquified natural gas for export to overseas markets.
Coastal GasLink is expected to be mechanically in-service — meaning mechanically completed — by the end of 2023, he added.
“Commercial in-service (gas will start flowing) of the Coastal GasLink pipeline will occur after completion of commissioning the pipeline,” TC Energy said.
“Together with LNG Canada, this project will provide the first direct path for Canadian natural gas to reach global LNG markets,” Poirier said.
TC Energy and LNG Canada have disagreed in the past over cost overruns on the massive export project.
Poirier said the revised agreement with LNG Canada “settles all outstanding disputes” and provides an expedited dispute resolution process. Crucially, the revised agreement will allow the two parties to work on the second phase of the Coastal GasLink project, expanding the capacity of the pipeline from 2.1 to 5 billion cubic feet per day — if the expansion is approved by regulators.
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The project has not had an easy road.
Since construction began in 2019, it has endured demonstrations and blockades from environmentalists and some First Nations groups.
Earlier this year, a remote drilling site that is part of Coastal GasLink was the target of a “co-ordinated attack” by 20 or so masked individuals, with the group inflicting millions of dollar worth of damage to equipment.
The pipeline has government approval for construction, as well as the support of all 20 elected First Nation councils that span the pipeline’s route through northern BC — though some members and supporters of the hereditary chiefs of the Wet’suwet’en people are opposed to the project.
In May, 11 member communities of the First Nations Major Projects Coalition (FNMPC) signed an option agreement to own a 10 per cent equity interest in Coastal GasLink.
With additional reporting from Meghan Potkins, Financial Post
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