TC Energy Corp. said the pandemic continues to inflict headaches on the biggest project under construction, the Coastal GasLink supply line designed to feed liquefied natural gas (LNG) supply for the Royal Dutch Shell plc-led LNG Canada project in northern British Columbia.
“We continue to expect project costs to increase significantly along with a delay to project completion,” said management. It had warned in February of coronavirus-related delays.
“Coastal GasLink will continue to mitigate cost increases and schedule deferrals and is working with LNG Canada on establishing a revised project plan and budget. Incremental costs will be included in the final pipeline tolls.”
Pandemic issues also continue to affect a Mexican project, Villa de Reyes, but it should be completed this year. TC noted. “Construction is ongoing but has been delayed due to Covid-19 contingency measures, which have impeded our ability to obtain work authorizations as a result of administrative closures. We expect to complete construction of Villa de Reyes in 2021.”
Meanwhile, the Calgary-based energy giant recorded a C$2.2 billion ($1.8 billion) loss on the Biden administration’s decision in January to cancel the U.S. construction permit for the Keystone XL oil export project.
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Overall losses in 1Q2021 totaled C$1.1 billion ($880 million) or minus C$1.11/share (minus 88 cents). In 1Q2020, TC’s profits were almost identical at C$1.1 billion ($880 million) or C$1.16/share (93 cents/share).
The Keystone loss eventually is expected to be reduced by nearly half when the Alberta government pays for its share of spending on the aborted 830,000 b/d project before construction stopped.
TC President François Poirier repeated that the Canadian team was “very disappointed” when Biden kept his 2020 election promise to revoke the Trump administration’s permit.
No next steps were revealed, but ways to recover Keystone losses in the United States remain under review.
While regretting the end of the 10-year-old oil export pipeline proposal, executives vowed to march in step in the future with evolving U.S. and Canadian climate change policies that contributed to the Keystone cancellation.
“We are exploring opportunities to electrify and use renewable energy to power certain of the company’s proprietary energy loads, with the goal of a net reduction in emissions across our footprint,” management stated.
“In all our operations and projects, we remain focused on managing, reducing or eliminating our greenhouse gas emissions to the fullest extent possible.”
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