Canada’s TC Energy flat in Q4, down in 2021
Canadian energy infrastructure company TC Energy reported flat net income in Q4 2021 on February 15 but a sharp drop in net income for all of 2021.
Net income attributable to common shares in the quarter was steady at C$1.1bn (US$860mn), it said, while net income attributable to common shares for all of 2021 fell to C$1.8bn from C$4.5bn. But comparable earnings for the year rose slightly, to C$4.2bn from C$3.9bn in 2020.
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“Our C$100bn diversified portfolio of high-quality, long-life energy infrastructure assets continued to perform extremely well in 2021, as evidenced by our strong financial results,” CEO Francois Poirier said. “Comparable earnings of C$4.2bn…and comparable funds generated from operations of C$7.4bn reflect the strong demand for our services, contributions from new assets placed into service and our constant focus on operational excellence.”
Through 2021, the company placed about C$4.1bn of new assets into service and sanctioned another C$7bn of new projects, including maintenance capital. It now has about C$24bn of commercially-secured projects in its portfolio, including about C$6.5bn of projects expected to enter service in 2022, Poirier said.
In Canada, while TC Energy’s 25%-owned Coastal GasLink (CGL) pipeline serving the LNG Canada project on the west coast is nearly 60% complete, CGL and LNG Canada remain locked in a dispute over project costs and completion timing, TC Energy said.
“We continue to expect project costs to increase significantly along with a delay to project completion compared to the original project cost and schedule,” it said. “Coastal GasLink has sought to mitigate cost increases and schedule delays and will continue to do so.”
At issue is the recognition of certain costs and the impacts of those higher costs on the schedule for the C$6.6bn pipeline, designed to move about 2.1bn ft3/day of gas from BC’s northeast to the LNG Canada terminal near Kitimat. Discussions between CGL and LNG Canada continue, and no suspension of work activity is expected.
Although TC Energy hasn’t said what the final impact on project costs will be, it has bolstered project financing by about C$500mn through a revolving short-term facility, of which about C$1mn was outstanding at the end of 2021, and through the Q4 2021 execution of a subordinated loan agreement that will provide about C$3.3bn in bridge financing to the C$6.8bn project-level financing already in place, should it be required.