TC Energy said that its Coastal GasLink pipeline project has signed commercial agreements with LNG Canada to advance the project's second phase.
Three key points from the TC Energy announcement:
- Formalization of Commercial Framework: TC Energy and LNG Canada have signed official commercial agreements for Coastal GasLink (CGL) Phase 2, establishing the framework for front-end engineering, design, and project execution.
- Strategic Shift in Project Management: If the project proceeds, it will utilize a new execution model where LNG Canada serves as the construction manager, while TC Energy provides technical advisory services to double the pipeline's existing capacity.
- Geopolitical Drivers for Expansion: TC Energy CEO François Poirier noted that global supply disruptions caused by the Iran war have significantly increased the likelihood of a Final Investment Decision (FID) to expand Canada’s role as a reliable LNG supplier.
The agreements mark a key milestone for Coastal GasLink Phase 2, which still requires a final investment decision by LNG Canada and its joint venture participants, along with approvals from Coastal GasLink.
These agreements create a commercial framework that advances LNG Canada toward FID by supporting front-end engineering and design, as well as subsequent execution activities.
Earlier this week, TC Energy CEO François Poirier said that the disruption to global liquefied natural gas supplies caused by the Iran war makes it more likely that a second stage of Canada's massive LNG Canada facility will be built.
The parties will now further develop firm cost and schedule estimates for Coastal GasLink Phase 2, which, if approved, would be built under a new execution model involving both LNG Canada and Coastal GasLink.
"Doubling the transmission of natural gas through the existing pipeline will help further strengthen Canada's role as a reliable supplier to global LNG markets," said Poirier.
Under the agreements, LNG Canada will lead project construction as CGL Phase 2 execution manager and CGL will provide LNG Canada with technical advisory services.
Coastal GasLink connects gas fields in northwestern British Columbia with the Shell-led LNG Canada project.
