The estimated cost of the Coastal GasLink natural gas pipeline in northern British Columbia has soared 70 per cent to $11.2-billion, but TC Energy Corp. TRP-T says it’s optimistic about completing construction by the end of 2023.
The project previously carried a price tag of $6.6-billion for the 670-kilometre pipeline, which is designed to transport natural gas from northeast B.C. to LNG Canada’s $18-billion export terminal, which is under construction in Kitimat, B.C.
Capital costs have risen from the original estimate because of design changes, the impact of COVID-19, weather and other events, TC Energy said in a statement on Thursday as part of its second-quarter financial results.
“We continue to believe the project remains economically viable,” said the statement from TC Energy, an energy infrastructure company that will operate the pipeline.
TC Energy said it hopes LNG Canada will eventually expand its export capacity because that would improve Coastal GasLink’s financial performance.
For now, TC Energy chief executive officer François Poirier said Coastal GasLink has resolved a dispute over pipeline costs with LNG Canada. “Our revised agreements with LNG Canada establish a better framework for project advancement and one that further strengthens our long-term partnership,” he said during a conference call with industry analysts.
The infrastructure company’s goal is to complete Coastal GasLink by late 2023, start testing the pipeline in 2024 and have Shell PLC-led LNG Canada start shipping liquefied natural gas in 2025 for export on Asia-bound tankers.
TC Energy plans to make a $1.9-billion equity contribution toward the pipeline, starting with its first instalment next month.
Denita McKnight, LNG Canada’s vice-president of corporate relations, welcomed TC Energy’s announcement about resolving their differences.
“LNG Canada and its joint venture participants have reached a commercial resolution with Coastal GasLink (CGL) to address CGL’s cost and schedule performance,” Ms. McKnight said in a statement. “This positive step allows both companies to progress forward with a renewed focus on delivering the pipeline within the revised cost estimate, and to support LNG Canada’s first LNG cargo by the middle of this decade.”
The Coastal GasLink website says the pipeline has hit a milestone that shows 66 per cent overall progress, including engineering and procurement, with 58.5 per cent of construction completed. LNG Canada estimates that its Kitimat project is more than 60 per cent completed.
Calgary-based TC Energy posted an $889-million profit in the second quarter, down 9 per cent from the same period in 2021. Its quarterly revenue climbed 14 per cent year over year to $3.64-billion.
TC Energy concluded the sale of a 65-per-cent stake in the pipeline venture in 2020 to Alberta Investment Management Corp. and KKR & Co. Inc.
TC Energy, which currently owns 35 per cent of Coastal GasLink, announced a deal in March to set aside a 10-per-cent stake for the planned equity sale to as many as 20 elected First Nation councils along the pipeline route.
Those elected band councils have agreed to support the pipeline. But the Office of the Wet’suwet’en, a non-profit society that represents hereditary chiefs who oppose the pipeline, maintains that elected Indigenous leaders don’t have jurisdiction over the Wet’suwet’en’s traditional, off-reserve territory.
A group of Wet’suwet’en hereditary chiefs and their supporters have staged protests at Coastal GasLink construction areas near Houston, B.C., over the past four years.
John Ridsdale, a climate activist whose Wet’suwet’en hereditary chief name is Na’Moks, said such opposition to pipeline construction remains steadfast. “No change,” he said in a text message to The Globe and Mail on Thursday.
Nearly 5,000 people are working this month on the pipeline across British Columbia, while LNG Canada entered its busiest building schedule this spring, requiring up to 7,500 workers on rotation.
Costs related to the entire supply chain had been pegged at $40-billion, which includes $18-billion for LNG Canada’s first phase of the Kitimat export terminal and infrastructure that includes the pipeline, as well as drilling for natural gas in northeast British Columbia. But with the extra $4.6-billion now budgeted for pipeline costs, that increases the total to $44.6-billion.
The co-owners of the LNG Canada joint venture are pondering whether to approve Phase 2, which would double the export capacity to 28 million tonnes a year. LNG Canada has not indicated when it will make a final decision.
Coastal GasLink president Bevin Wirzba said talks with LNG Canada are in a well-advanced stage over the prospect of the Kitimat expansion and any future pipeline upgrades such as new compressor stations that would be required.
“So we’re in active discussions with LNG Canada around Phase 2 and the feasibility, doing the appropriate front-end work to establish what the scope and scale of that project will be,” Mr. Wirzba said. “The combination of Phase 1 and Phase 2 brings us back into a very competitive return scenario for the entire project.”
Ms. McKnight said LNG Canada and its co-owners, also known as joint venture participants (JVPs), are evaluating the timeline and scope for Phase 2. “Any final investment decision will take into account a range of factors, which include competitiveness, affordability, carbon intensity, technologies and individual JVP portfolio considerations,” she said.
LNG Canada is the only LNG export terminal under construction in the country.
Canada currently has no operational LNG export terminals. FortisBC’s Tilbury LNG plant in the Vancouver suburb of Delta is a small-scale operation mainly for domestic storage and has briefly exported only a small amount of LNG in containers.
Proponents of two export proposals on the East Coast, Pieridae Energy Ltd.’s PEA-T Goldboro LNG in Nova Scotia and Repsol SA’s Saint John LNG in New Brunswick, are studying the economics of shipping LNG to Europe, but face pipeline constraints in Central Canada and New England.
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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
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