TC Energy has announced that its Coastal GasLink (CGL) project has signed commercial agreements with LNG Canada for its second development phase.
This represents a significant step forward for CGL Phase 2, pending the final investment decision (FID) from LNG Canada and its joint venture partners, along with the necessary approvals from CGL.
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LNG Canada is a partnership formed by companies including Shell, Petronas, PetroChina, Mitsubishi and the Korea Gas Corporation.
The LNG Canada project shipped its inaugural cargo in June 2025. The facility is designed as a long-term asset with a 40-year export licence, allowing it to begin by exporting approximately 14 million tonnes of LNG each year.
The agreements outline the pathway for LNG Canada to reach FID, covering aspects such as front-end engineering, design and subsequent execution activities while adhering to strict capital, risk and governance measures.
The newly formed agreements include a plan for refining the cost and schedule estimates for CGL Phase 2.
If approved, this phase will begin construction under a new model co-managed by LNG Canada and CGL.
Under this arrangement, LNG Canada will take the lead on project construction as the execution manager, with CGL providing technical advisory services.
The commercial agreement limits CGL’s financial commitments and liability concerning construction costs and timelines, aligning with TC Energy’s goals to mitigate project execution risks and manage capital allocation effectively.
CGL retains full ownership and operational responsibility for the pipeline and any future pipeline infrastructure extensions.
Stretching more than 670km, CGL is designed to securely transport natural gas from north-eastern British Columbia (BC) to the LNG Canada facility in Kitimat, BC. There, the gas will be transformed into LNG for export to international markets.
The collaboration between CGL and LNG Canada leverages existing infrastructure from phase one to potentially increase the transport of lower-carbon Canadian LNG globally without additional pipeline construction.
Phase two involves developing compressor stations to double CGL’s capacity.
This development aims to create employment opportunities and contracts for indigenous and local communities within BC while addressing global demands for lower-carbon energy solutions.
The current focus is on evaluating the full potential of phase two, which involves detailed scope refinement, engineering assessments, meeting permitting requirements, conducting financial analysis, and engaging with indigenous and local communities.
TC Energy president and CEO François Poirier said: “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.
“Increasing LNG exports presents an extraordinary opportunity to transform our economy and establish our country as the number one LNG exporter to Asia.
“Natural gas pipelines continue to deliver secure, reliable and affordable Canadian energy, powering our economy, homes and businesses across the country. Coastal GasLink is the critical connection that allows our allies to share those same benefits and Canadian LNG strengthens global energy security while creating economic opportunities here at home.”
In August 2024, TC Energy, in partnership with the Northern New England Investment Company, finalised the sale of the Portland Natural Gas Transmission System in a transaction valued at $1.14bn (C$1.57bn).
