Coastal GasLink 83% complete, costs increase C$3.3 billion

TC Energy Corp. has updated cost estimates for its 2.1-bcfd Coastal GasLink natural gas pipeline in Western Canada, ascribing the adjustments to material cost pressures that include shortages of skilled labor, impacts of contractor underperformance and disputes, and unexpected events like drought conditions and resulting erosion and sediment control problems. The company now expects Coastal GasLink to cost C$14.5 billion ($10.9 billion), up from C$11.2 billion.

Coastal GasLink is about 83% complete, according to TC Energy. The entire route has been cleared, grading is more than 94% complete, and more than 485 km of the 670-km, 48-in. OD pipeline has been backfilled, with restoration activities under way in many areas.

Commissioning has started of the Wilde Lake compressor and meter station at Groundbirch, BC, with the introduction of natural gas expected in March 2023. Coastal GasLink is expandable to as much as 5 bcfd with the addition of compression along its route and subject to additional permitting. The pipeline will supply the 14-million tonne/year LNG Canada liquefaction plant under development in Kitimat, BC.

The project is targeting mechanical completion by year-end 2023, with commissioning and cleanup work continuing into 2024-25. Extension of construction well into 2024, another possibility considered, would increase costs by up to an additional $1.2 billion.