After six years working with its partners, Indigenous groups and local BC communities, TransCanada announced on Tuesday that it will proceed with construction of the Coastal GasLink pipeline project.  TransCanada photo.

Coastal GasLink pipeline will carry natural gas from northeastern BC to LNG Canada in Kitimat

TransCanada announced on Tuesday that it will build the $6.2 billion Coastal GasLink pipeline project to transport natural gas from northeastern British Columbia to LNG Canada’s liquified natural gas facility in Kitimat, BC.

The move comes one day after partners in LNG Canada, Shell, Petronas, PetroChina, Mitsubishi Corporation and KOGAS, announced they gave the go-ahead to build the $40 billion LNG Canada plant.

Construction of the 670 kilometre pipeline will begin in early 2019 and it is expected to be operational by 2023.  TransCanada says it has received all necessary major regulatory permits required to proceed with construction.

“Today’s announcement signifies an important step forward for Coastal GasLink as well as for the province of B.C. and the country,” said Russ Girling, TransCanada’s president and chief executive officer.

Girling adds that his company worked with BC communities and Indigenous groups “toward a single goal of fostering an LNG industry off Canada’s West Coast that will help maximize the value of our important natural gas resources in a sustainable and responsible way”.

The company says it has signed project and community agreements with all 20 elected Indigenous bands along the pipeline route.  TransCanada says it worked directly with Indigenous groups and provided meaningful opportunities for input in project planning. And, to date, more than one-third of all field work completed on the project has been conducted by Indigenous people.

Already $620 million has been awarded to Indigenous businesses and contractors involved in construction activities.

TransCanada says it expects to spend an addition $400 million in northern BC communities and Indigenous communities during construction.

“It is time to build this pipeline,” said Girling. “We are ready to do that and want to express our deepest gratitude to those communities and First Nations groups who have supported our project over the past six years.”

The Calgary-based company says it conducted over 441,000 hours of environmental field studies to assess aquatic habitat, wildlife, terrain, soils, vegetation and wetlands, atmospheric environment, hydrology, archeological resources and timber.

Coastal GasLink will run from the Montney gas-producing region near Dawson Creek, BC to the LNG Canada facility in Kitimat.  From there, LNG can be loaded onto tankers and shipped to customers in Asia.

According to TransCanada, the pipeline will have an initial capacity of about 2.1 billion cubic feet per day (Bcf/d), with the potential of expansion of up to approximately 5 Bcf/d.

The estimated $6.2 billion project is underpinned by 25-year transportation service agreements, with additional renewal provisions, that have been entered into with the LNG Canada Participants and includes pre-development costs to date of approximately $470 million.

According to TransCanada, as part of its funding plan, it will explore joint venture partners and project financing for the pipeline.

“Once constructed, Coastal GasLink will become a critical component of British Columbia’s natural gas pipeline infrastructure, connecting our abundant, low-cost natural gas resources to global markets,” added Girling.

“Solid underlying market fundamentals, combined with robust commercial support for the project, position us to prudently fund Coastal GasLink over its multi-year construction along with our existing $28 billion near-term capital program in a manner consistent with our long-established strong financial profile.”

The Coastal GasLink Pipeline project will employ 2,000-2,500 people during construction and generate approximately $20 million a year in ongoing property tax benefits to B.C. communities.