MONTREAL (Oil Monster): TC Energy will proceed with the second phase of its Coastal GasLink pipeline expansion after LNG Canada and its joint venture partners approved the Phase 2 expansion of the Kitimat liquefied natural gas export facility.
The decision clears the way for TC Energy to nearly double the amount of natural gas that Coastal GasLink can transport to LNG Canada by adding compressor stations and upgrading facilities along the existing 670-kilometre pipeline route between Dawson Creek and Kitimat, British Columbia.
Coastal GasLink currently transports approximately 2.1 billion cubic feet of natural gas per day from northeastern British Columbia to LNG Canada's liquefaction facility in Kitimat.
Phase 2 will increase transportation capacity through additional compression rather than construction of another pipeline.
The project calls for five new compressor stations positioned along the existing route, along with modifications and upgrades to existing and planned facilities.
TC Energy said the expansion will allow more natural gas from the Western Canada Sedimentary Basin to reach LNG Canada and, ultimately, international LNG markets.
The Coastal GasLink expansion became fully actionable after LNG Canada and its partners approved Phase 2 of the Kitimat export terminal.
LNG Canada Phase 2 will add two additional liquefaction trains and double the facility's production capacity from approximately 14 million tonnes per annum to 28 million tonnes per annum.
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The LNG Canada joint venture includes Shell, PETRONAS, PetroChina, Mitsubishi Corporation and Korea Gas Corporation.
Under commercial agreements between the two companies, LNG Canada will serve as execution manager for construction of Coastal GasLink Phase 2.
Coastal GasLink will remain the owner, operator and permit holder for the pipeline and associated facilities, while TC Energy will provide technical, procurement and operational support.
TC Energy said the structure is designed to limit Coastal GasLink's exposure to construction costs and schedule risks.
TC Energy expects construction of Coastal GasLink Phase 2 to begin in early 2027.
The company currently expects the expanded infrastructure to enter service in the early 2030s, aligning with the planned startup of LNG Canada Phase 2.
Up to 2,100 workers are expected to be employed during peak construction across five work sites, according to TC Energy.
Coastal GasLink became Canada's first direct pipeline connection between western Canadian natural gas production and a large-scale LNG export terminal on the Pacific coast.
The existing system runs approximately 670 kilometres from the Dawson Creek area to Kitimat.
TC Energy said the expansion will increase transportation capacity without installing a second pipeline, allowing the company to make greater use of infrastructure already in place.
The company has identified LNG exports as a major source of expected North American natural gas demand growth over the coming decade.
TC Energy operates one of North America's largest natural gas pipeline networks and says its infrastructure moves more than 30% of the natural gas used across the continent each day.
The Coastal GasLink expansion adds to a broader portfolio of natural gas infrastructure investments as LNG exports and power generation continue to influence demand across North America.
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Coastal GasLink Phase 2 will now move into execution ahead of the expected early-2027 construction start.
The timing of the pipeline expansion is closely tied to development of LNG Canada Phase 2, with both projects targeting operation in the early 2030s.
Sources: TC Energy; LNG Canada; Reuters.
Courtesy: www.reuters.com
