Coastal GasLink Seeks C$1.2 Billion from Contractor over Delays

SEATTLE (Oil Monster): The natural gas pipeline partnership Coastal GasLink (CGL) operated by Canadian TC Energy has sought C$1.2 billion from one of its main pipeline contractors for causing unprecedented delay in construction activities.

It must be noted that TC Energy had begun planning the construction of Coastal GasLink in 2012. The pipeline construction was completed in October this year at more than twice its original budget. The construction of the pipeline through B.C’s Rocky Mountains to the Pacific Coast was delayed on account of various reasons including mudslides, stoppage of works due to pandemic, steep terrain as well as violent protests in between.

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TC Energy had terminated the contract with Pacific Atlantic Pipeline Construction's (PAPC) last year and is now claiming C$1.2-billion from the contractor as the cost incurred by it towards finding new contractors, Blaine Trout.

CGL had approached an Alberta Court with the argument that it is legally entitled to draw on a C$117-million letter of credit, issued by HSBC to it as a performance guarantee for PAPC. The cost of PAPC’s failure to perform significantly exceeds the amount of letter of credit, said the statement issued by TC Energy.

The government-owned Trans Mountain pipeline expansion, aimed at boosting oil exports, too had faced delays and escalating costs.