LNG Canada signs key pipeline agreement required for phase two expansion

The LNG Canada facility in Kitimat, B.C.. Photo by Government of B.C./FileArticle contentThe owners of the Coastal GasLink pipeline say they have reached an agreement with LNG Canada to advance a potential doubling of the pipeline’s capacity to supply a second phase of the liquefied natural gas export facility in British Columbia, pending a final investment decision.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentIf it proceeds, the pipeline’s expansion would be built under “a new execution model” involving both LNG Canada and Coastal GasLink — the pipeline partnership operated by TC Energy Corp. — according to a statement released Wednesday.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe agreements would see LNG Canada lead construction of the expansion as “execution manager” while TC Energy-backed Coastal GasLink would take on a technical support role — a move apparently intended to transfer more of the construction and cost overrun risk to the LNG facility’s owners.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“The commercial structure includes limits on CGL’s capital commitments and overall liability for construction cost and schedule risks,” TC said in a statement. “This is consistent with TC Energy’s strategic objectives to reduce project execution and capital allocation risk.”Article contentTC Energy completed the original Coastal GasLink project in 2023 at more than double the original budget after facing significant challenges throughout the five-year construction period.Article contentThe pipeline giant subsequently sold a majority stake in the 670-kilometre pipeline to private equity firm KKR & Co. and the Alberta Investment Management Corp. (AIMCo) and offered a 10 per cent equity stake option to Indigenous communities.Article contentThe 2.1-billion-cubic-feet-per-day pipeline transports natural gas from northeastern British Columbia and northwestern Alberta to the LNG Canada facility in Kitimat, B.C. Expanding capacity to roughly five billion cubic feet per day would be required for a proposed second phase of the LNG project — which analysts say could be green-lit later this year.Article content“Doubling the transmission of natural gas through the existing pipeline will help further strengthen Canada’s role as a reliable supplier to global LNG markets,” TC Energy chief executive François Poirier said in a statement.Article content“Increasing LNG exports presents an extraordinary opportunity to transform our economy and establish our country as the number one LNG exporter to Asia.”Article contentTrending Meet the Canadian e-bike maker who is redefining the factory floor Electric Vehicles Why market bets for interest rate hikes in Canada are so high Economy Wealthsimple receives regulatory approval to offer prediction markets to investors Fintech Canada’s economic performance has been lagging the U.S. for years, and Statistics Canada delves into why Economy Posthaste: Many Canadians could be committing insurance fraud — and don't even know it News Share this article in your social network Get the latest from Meghan Potkins straight to your inbox Sign Up CommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Meet the Canadian e-bike maker who is redefining the factory floor Electric Vehicles Why market bets for interest rate hikes in Canada are so high Economy Wealthsimple receives regulatory approval to offer prediction markets to investors Fintech Canada’s economic performance has been lagging the U.S. for years, and Statistics Canada delves into why Economy Posthaste: Many Canadians could be committing insurance fraud — and don't even know it News