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It was significant cost overruns related to Coastal GasLink’s construction that prompted TC to begin selling assets — including the Prince Rupert Gas Transmission line — four years ago in a bid to shore up its balance sheet. The company ultimately sold the project to the Nisga’a Nation and Houston-based developer Western LNG in March 2024.
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The pipeline giant has since largely recovered, reining in debt while focusing on smaller system expansions, particularly in the U.S., where it says returns have been stronger, rather than on new mega-projects.
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But analysts say TC may now be preparing to loosen its purse strings, potentially lifting its self-imposed $6 billion annual spending cap as it eyes new growth opportunities.
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A recent settlement with customers over tolls on the company’s Canadian Mainline natural gas pipeline could improve the outlook for investment in Canadian projects in particular. Combined with an earlier agreement on its NGTL system, it is “potentially paving the way for a more attractive deployment of capital in Canadian natural gas pipelines moving forward,” RBC Capital Markets analyst Maurice Choy wrote.
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Still, analysts say the company is likely to be cautious about returning to a major new pipeline build in B.C., TD Cowen analyst Aaron MacNeil said.
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“There’s a lot of scar tissue there, and among investors as well,” MacNeil said. “They’d have to have the right contractual protections; they’d have to have the right buy-in from stakeholders, the returns would have to be there. You’d have to check a lot of boxes before they went with something like that.”
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Some experts say the conflict — and its potential impact on global oil and LNG flows — could create a new opening for Canadian energy exports.
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Even before U.S. and Israeli strikes on Iran sent energy prices soaring, both LNG Canada Phase 2 and Ksi Lisims LNG had been referred to Ottawa’s major projects office as part of the federal government’s push to diversify export markets.
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“It raises the interest in investing in energy in countries where there’s political stability, where there’s no choke point like there is in the Strait of Hormuz, and there’s no geopolitical risk,” Gitane De Silva, former chief executive of the Canada Energy Regulator, said Thursday.
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“I think people are asking the question, do we want to continue to be that beholden to a volatile part of the world, or do we want to seek different countries where we can buy reliable energy.”
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De Silva said it would be “logical” for the Nisga’a Nation and Western LNG to partner with an established pipeline company, potentially allowing them to maintain ownership while making use of TC’s expertise and prior knowledge of the project.
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The Prince Rupert Gas Transmission line which is planned to transport two billion cubic feet per day of natural gas from northeastern B.C. to the West Coast, was initially proposed in 2013 by TC Energy, then known as TransCanada, to supply the Petronas-backed Pacific NorthWest LNG project.
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The Nisga’a Nation and Western LNG eventually took over the LNG project after Petronas exited in 2017, and subsequently acquired the permits and certificates for its pipeline as well.
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“At the time, we were capital constrained and we actually felt — and still do — that an Indigenous-led project would have the best odds of (proceeding) and we still feel that that was a good judgment on our part,” Poirier said.
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Now, Ksi Lisims’ prospects may be improving, he said.
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But would TC have the appetite to build another major pipeline in B.C.?
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“As opposed to theorizing on what would happen, I would prefer to wait and see when and if they come to us,” he said.
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