TC is building Coastal GasLink to supply LNG Canada, the Royal Dutch Shell-led liquefied natural gas project in Kitimat, but work was delayed by the COVID-19 pandemic and costs are expected to increase. The cost was previously estimated at C$6.6 billion ($5.31 billion).
"We are in disagreement with LNG Canada over the alignment of cost and schedule and have been in discussion for some time now," Tracy Robinson, Coastal GasLink president told a TC earnings call.
"They are progressing but if we're not able to reach a resolution in the near-term there will be some implications to our construction."
TC has 5000 people working on the pipeline corridor and said the project is nearly 50% complete. LNG Canada is due to start operating around 2025.
The Calgary-based company released second-quarter earnings that beat estimates for quarterly profit, as demand for its transport services returned with a rebound in crude prices.
Net income attributable to common shares rose to C$982 million, or C$1 per share, in the three months ended June 30, compared to a loss of C$1.06 billion, or C$1.11 per share, in the prior quarter.
In the first quarter TC had taken hit of C$2.2 billion in impairment charges related to the suspension of its Keystone XL pipeline after U.S. President Joe Biden revoked a key permit.
Its comparable earnings stood at C$1.05 billion, or C$1.07 per share. That beat estimates of 96 Canadian cents per share, according to Refinitiv IBES data.
($1 = 1.2454 Canadian dollars)
($1 = 1.2441 Canadian dollars)
(Reporting by Arunima Kumar in Bengaluru; editing by Uttaresh.V and Chris Reese)
By Nia Williams and Arunima Kumar
