That’s it! Until now, Coastal GasLink was a joints of pipe. Now it’s a completed pipeline. TC Energy
CALGARY — The Coastal GasLink pipeline, one of the largest energy infrastructure projects in recent Canadian history, is physically complete.
TC Energy Corp., the company behind the project, said Monday it has finished installing pipe along the entire 670-km route from Dawson Creek, B.C. to Kitimat, B.C. — a milestone that marks the culmination of over five years of construction and 10 years of planning.
The final weld was completed Oct. 7 at the base of Cable Crane Hill near Kitimat, TC Energy said.
The company said mechanical completion of the pipeline, which involves final documentation, engineering analysis and testing, will be done before the end of the year.
Monday’s news was broadly hailed by the Canadian energy sector and industry watchers, who called it a significant step forward.
The Coastal GasLink pipeline is one of two major pipelines — the second being the Trans Mountain oil pipeline — expected to come online in the coming months. Both are viewed by Canada’s energy sector as potentially transformative, in terms of their ability to improve access to markets and to allow oil and gas companies to expand their production.
The Coastal GasLink pipeline will transport natural gas from western Canada to the Shell-led LNG Canada processing and export facility currently being built in Kitimat — opening up new Asian markets for domestic natural gas drillers.
“First of all, just getting a pipeline to tidewater is huge,” said Heather Exner-Pirot, director of energy, natural resources and environment for the Macdonald-Laurier Institute.
“I think the last time we did this was the 1950s. So this (pipeline completion) is just stunning to think of in itself, for Canada.”
The “golden weld,” the last weld completing the pipeline. TC Energy
“But it also means we finally see some light at the end of the tunnel in terms of getting into the LNG (liquefied natural gas) game,” she added.
“We have just this incredible Montney reserve, this incredible reserve of natural gas, and now we can finally get some out to our own tidewater.”
The LNG Canada facility, which will be the first liquefied natural gas export facility in Canada, is still under construction. But the company said in an update in July that the project is 85 per cent complete and on track to start shipping its first cargoes by mid-decade.
LNG Canada, a more than $40-billion project, represents the single largest private investment in Canadian history.
Until it and Coastal GasLink come online, Canadian gas producers wishing to export LNG have no choice but to ship their natural gas from Western Canada all the way to LNG facilities on the U.S. Gulf Coast.
“There’s no question, (the Coastal GasLink completion) is very positive. Market access has been a critical barrier,” said Tristan Goodman, president of the Explorers and Producers Association of Canada, which represents more than 140 Canadian oil and gas companies.
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Goodman added that tapping into global LNG markets is critical for the future growth of the Canadian natural gas sector, which believes its product can be used as a cleaner-burning alternative to emissions-heavy coal in parts of Asia.
“This (Coastal GasLink) is critical from a natural gas production standpoint. Depending on how you’re looking at LNG growth, you could actually see a doubling of natural gas production (in Canada) in the coming years,” he said.
But the completion of the Coastal Gas pipeline has not been without challenges. What was initially expected to be a $6.2-billion capital project has run into significant budget overruns over the course of construction. Estimated project costs climbed first to $11.2 billion, and most recently to $14.5 billion, according to TC Energy’s latest project price tag estimate as of February.
Contributing to the increased costs have been unexpected construction issues, including problems with erosion and sediment control, and rising labour costs.
TC Energy
TC Energy itself has been under significant scrutiny from investors and credit rating agencies for its heavy debt load as well as for the spiralling costs of Coastal GasLink.
The project has also attracted opposition and protests from environmentalists and Indigenous leaders. While most Indigenous groups along the project’s pathway support the pipeline, the hereditary Wet’suwet’en chiefs, whose territory the pipeline crosses, do not.
In the winter of 2020, protesters blockaded freight and passenger rail services across the country to show solidarity with the Wet’suwet’en.
However, over the course of the project, TC Energy also successfully signed agreements with 17 of the 20 Indigenous communities located along Coastal GasLink’s route to acquire a 10 per cent equity stake in the project.
Exner-Pirot said that kind of “groundbreaking” solution has essentially set the bar for Indigenous economic reconciliation in Canada when it comes to major resource project development going forward.
“Obviously the Wet’suwet’en blockades became what people know about Coastal GasLink,” she said.
“But for Coastal GasLink to offer an equity option before the pipeline was built was some very creative financial work to get Indigenous communities a piece of the action. There probably is no better example in Canada, from any sector, of how to involve Indigenous communities.”
This report by The Canadian Press was first published Oct. 30, 2023.
Companies in this story: (TSX:TRP)
Amanda Stephenson, The Canadian Press
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