The company said in November that Coastal GasLink’s costs would be much higher than anticipated, but it didn’t provide a number at the time.
The new cost estimate is slightly higher than expected, and TC Energy’s warning of another possible increase “will be an overhang for the stock,” RBC Capital Markets analyst Robert Kwan said in a note.
The pipeline, which will feed the Shell Plc-led LNG Canada plant on the British Columbia coast, has been delayed by a series of challenges including Covid-19, skilled-worker shortages and protests by environmentalists. Right now, the project is 83% complete and the company is targeting “mechanical completion” by the end of this year, TC Energy said.
“We are disappointed with the increase in the Coastal GasLink Project costs,” Chief Executive Officer Francois Poirier said in a statement. “We continue to be laser-focused on safely completing this critical piece of energy infrastructure at the lowest possible cost.”
Calgary-based TC Energy will take a impairment charge on its Coastal GasLink investment when it reports fourth-quarter results.
Share This: