Canada’s TC Energy Reports Q1 Gains
Canada’s TC Energy, active in the oil and gas pipeline, power generation and gas storage businesses, said May 1 it had Q1 2020 net income of C$1.15bn (US$815mn), a modest gain of C$144mn year-on-year.
Pre-tax earnings rose C$152mn, to C$2.5bn, as higher earnings from TC Energy’s natural gas pipeline activities in the US, Canada and Mexico and from its power and storage businesses were partly offset by less from its liquids pipelines.
“We are living in unprecedented times with the Covid-19 pandemic having a significant impact on millions of people around the world,” CEO Russ Girling said. “The availability of our infrastructure has remained largely unimpacted by recent events with utilisation levels robust and in line with historical norms.”
In its Canadian gas pipelines business, the company said it expects to close in the second quarter the previously-announced sale of a 65% interest in the Coastal GasLink pipeline, which will serve LNG Canada’s Kitimat liquefaction terminal, to a partnership of KKR-Keats Pipeline Investors and a subsidiary of Alberta Investment Management Corp. As part of the transaction, TC Energy will be contracted to construct and operate the 670-km pipeline.
The company expects to record an after-tax gain of about C$600mn when the transaction closes.
“Construction activities continue along the pipeline route with approximately 75% of clearing completed and approximately 35% of pipe stockpiled,” TC Energy said. “Major work is now complete for the winter season with crews waiting to remobilise following spring breakup.”
In February, the Canada Energy Regulator, which replaced the National Energy Board as Canada’s federal regulatory agency for energy infrastructure, recommended approval of TC Energy’s 2021 NGTL expansion program – which would add about 1bn ft3/day of Western Canadian Sedimentary Basin export capacity – to the federal government. At quarter-end, the company was still awaiting a decision on that recommendation from the federal Cabinet.
In the power and storage business, TC Energy completed and commissioned the Napanee gas-fired generating station in Ontario in March, and subsequently sold that station and two others to a subsidiary of Ontario Power Generation. A pre-tax loss of about C$520mn was taken on the transaction.