Page 8 - NorthAmOil Week 48 2022

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

TC Energy approved to expand NGTL system

CANADA CANADA’S TC Energy has received approval said the company. “The project has also been
from Ottawa to expand its Nova Gas Transmis- impacted by other unexpected events including
sion Line (NGTL) gas pipeline system, which drought conditions, and erosion and sediment
connects 75% of Canada’s overall production to control challenges.”
domestic and export markets. The company said it expects to provide an
The system is 15,219 miles (24,494 km) in updated capital cost estimate in early-2023.
length. The West Path Delivery 2023 project will The project is now overall 80% complete and
add about 25 miles (40 km) of new natural gas should achieve mechanical completion by the
pipeline to the existing system. end of 2023.
In 2019, Calgary-based TC Energy “Although Phase One of Coastal GasLink has
announced a CAD1.2 bn ($893.3mn) expan- been challenged by cost performance, we do not
sion programme, boosted by new long-term expect any impact on the sustainability of our
and firm service contracts for around 258mn dividend growth rate of 3-5% or our ability to
cubic feet (7.3mn cubic metres) per day. accelerate our deleveraging target from 2026,”
“Our expansion programmes are an impor- said TC Energy’s president and CEO, François
tant and integral part in bringing on additional Poirier.
natural gas pipeline capacity to meet growing
demand across North America and globally Trans Mountain
as we work to support energy transition and Cost overruns are not limited to gas pipelines.
energy security needs,” stated the company fol- The Trans Mountain oil pipeline expansion The company
lowing the approval. project, which being developed by the Cana-
Construction is set to begin in the first quar- dian government after it bought the project is expecting
ter of 2023, with an anticipated in-service date from Kinder Morgan, has also struggled with
of November 1, 2023. escalating costs. In February, the subsidiary a “material
Canada’s gas production has grown to 18bn said its cost could reach CAD21.4bn ($15.7bn),
cubic feet (510 mcm) per day, and so much of up from an earlier estimate of CAD12.6bn increase” in the
the transmission system’s capacity is being used ($9.2bn). cost of its 416-
that gas exports can be stranded in Alberta and The expanded pipeline will run from Alberta
British Columbia, pushing down spot prices. to BC’s West Coast. It would ship 890,000 bar- mile (670-km)
TC Energy’s efforts to expand pipeline capac- rels per day (bpd) of oil from Edmonton to the
ity have been hampered by poor weather, labour Port of Vancouver, up from 300,000 bpd. The Coastal GasLink
shortages, tighter environmental requirements 1953 pipeline is the only one to run between
and delays in regulatory and government per- Alberta and the West Coast. pipeline.
mitting. Indeed, the company is expecting a At the time, Trans Mountain cited flooding in
“material increase” in the cost of its 416-mile BC, wildfires caused by drought and the Covid-
(670-km) Coastal GasLink pipeline project, 19 pandemic as reasons for the increased price
which would carry gas from northern BC to the tag.
LNG Canada export terminal. When the federal government took over the
“We continue to face significant cost pres- project in 2018, the expansion was expected to
sures in Western Canada relating to labour cost CAD7.4bn ($5.4bn). The government has
costs and shortages of skilled labour, along with said that more public funds will not be invested
contractor underperformance and disputes,” into the project.™

P8 www. NEWSBASE .com Week 48 01•December•2022