TC Energy ( NYSE: TRP ) said Wednesday its estimate of the costs to complete the Coastal GasLink project in western Canada has increased to ~C$14.5B , causing the company to raise its FY 2023 capital spending outlook to C$11.5B-C$12B.
TC ( TRP ) said the project continues to face material cost pressures, including challenging conditions in the labor market, shortages of skilled labor, and other unexpected events such as drought conditions and erosion and sediment control problems.
Six months ago , TC ( TRP ) nearly doubled its cost estimate for the Coastal GasLink pipeline to nearly C$9B.
Project costs would rise further by as much as C$1.2B if construction is extended well into 2024.
The company said it will recognize an impairment to its equity investment in Coastal GasLink in its Q4 2022 financial results.
TC Energy's ( TRP ) overspending is a cause for concern given its implications for the company’s leverage, HFIR Energy Income writes in an analysis published recently on Seeking Alpha .
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TC Energy raises Coastal GasLink cost estimate to C$14.5B