Canada’s TC Energy Completes CGL Sale [UPDATE]
Canadian infrastructure developer TC Energy said May 25 it has completed the partial monetisation of its Coastal GasLink (CGL) pipeline, the 670-km conduit that will deliver 2.1bn ft3/day of natural gas to the Anglo-Dutch Shell-led LNG Canada project on British Columbia’s northern coast.
A 65% equity interest in CGL has been sold to a partnership of KKR & Co and Alberta Investment Management Corp (AimCo). TC Energy has realised immediate proceeds of about C$2.1bn (US$1.5bn) on the transaction.
TC Energy also reaffirmed its commitment to partnering with the 20 First Nations along the CGL route and has provided them an opportunity to acquire a 10% equity interest in CGL under similar terms to those offered to KKR and AimCo.
KKR, AimCo and TC Energy comprise the Coastal GasLink Pipeline Limited Partnership, which has executed a credit agreement with a syndicate of banks extending non-recourse project-level financing that will fund the majority of the C$6.6bn cost of the pipeline. Export Development Canada has also extended C$250-$500mn of project financing to the partnership.
Meanwhile, CGL says construction activity along the pipeline right-of-way is beginning to resume after a pause for spring break-up and to suppress the spread of Covid-19. By the end of May, the total workforce is expected to reach 650, with activities to focus on environmental monitoring and field work, grading, grubbing and site preparation to position the project for pipe assembly and installation later in the summer.
By the end of April, about 75% of the 670-km right-of-way had been cleared and 297 km of pipe has been delivered to various storage locations along the right-of-way.
The CGL route has been divided into eight sections between Dawson Creek, in BC’s northeast, and Kitimat, where the LNG Canada plant is under construction. Seven of those eight sections have seen substantial right-of-way clearing – as much as 100% on one section, and more than two-thirds on all the other sections.
But Section 7 – a 78-km spread that spans Wet’suwet’en traditional territories south of Houston – has seen no right-of-way clearing and little clearing of ancillary sites. The section is in an area that saw protests and blockades supporting some hereditary chiefs of the Wet’suwet’en who are opposed to the pipeline, despite the fact that the Wet’suwet’en were among the 20 First Nations that signed project benefit agreements with CGL.
Field work continues to progress in Section 7, a TC Energy spokeswoman told NGW in an emailed statement, in anticipation of commencement of construction later this summer.
“The 2019 activities in Section 7 were focused on access and road building, as well as workforce accommodations establishment so that we could commence clearing in summer 2020 as planned,” she said.
Earlier this month, Wet’suwet’en hereditary chiefs signed a memorandum of understanding (MOU) with the BC and Canadian governments to negotiate rights and title to the nation’s 22,000 km2 of traditional territory, but those negotiations will exclude any talk surrounding the CGL project.
Although it wasn’t a party to the MOU, CGL is fully supportive of the reconciliation efforts the Wet’suwet’en community is taking with the federal and provincial governments, the spokeswoman said.
“Our understanding is that this agreement is not retroactive and has no effect or impact on Coastal GasLink construction,” she said. “This project is authorised and permitted and work will continue as planned and we continue to have safe access to the areas we need to conduct that work.”