TC Energy is moving ahead with the second phase of its Coastal GasLink pipeline after LNG Canada and its joint venture partners reached a final investment decision on expanding the LNG export facility in British Columbia.
Coastal GasLink currently transports around 2.1 billion cubic feet per day of natural gas from the Dawson Creek area to LNG Canada’s terminal in Kitimat. Phase 2 is designed to nearly double that capacity through the installation of additional compressor stations and upgrades to existing facilities along the 670-kilometer pipeline corridor.
Importantly, the expansion will not require construction of a new pipeline route, allowing TC Energy to increase throughput by adding compression and modifying existing infrastructure.
Construction is expected to begin in early 2027, with the expanded system targeted to enter service in the early 2030s.
Under commercial agreements reached earlier in 2026, LNG Canada will act as execution manager for the Phase 2 construction program. Coastal GasLink will retain ownership of the pipeline and remain its operator and permit holder, while TC Energy will provide technical, procurement and operational support.
The arrangement is structured to limit Coastal GasLink’s direct capital commitments and reduce its exposure to construction costs and schedule risks.
The decision represents another major expansion of Canada’s emerging LNG export sector. LNG Canada began establishing a direct export route for Western Canadian natural gas to Asian and other international markets, creating a new source of demand for production from the Western Canada Sedimentary Basin.
Higher pipeline capacity will allow additional gas supply to reach the Kitimat terminal as LNG Canada expands its liquefaction capacity.
TC Energy has identified LNG exports as the largest source of incremental North American natural gas demand over the coming decade, as additional export terminals on both the Canadian and U.S. coasts increase competition for gas supply.
The pipeline company also expects the project to generate substantial regional economic activity. TC Energy estimates as many as 2,100 workers could be employed at five sites during peak construction.
The original Coastal GasLink project generated roughly 25,700 full-time-equivalent jobs in British Columbia during its multi-year construction period and awarded more than C$1.8 billion in contracts to Indigenous and local businesses, according to the company.
Coastal GasLink has long-term agreements with 20 elected Indigenous communities along the pipeline route, relationships TC Energy said will continue through the expansion.
For Western Canadian gas producers, the Phase 2 decision strengthens the connection between prolific upstream supply and international LNG markets, potentially increasing long-term takeaway capacity from a basin that has historically depended heavily on pipeline access to the United States.
By Charles Kennedy for Oilprice.com
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Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
