TC Energy forecasts higher costs for Coastal GasLink pipeline in 2023

Nov 29 (Reuters) – North American oil and gas pipeline company TC Energy Corp (TRP.TO) on Tuesday forecast higher adjusted core earnings for 2023 and said it expects costs related to its long-delayed Coastal GasLink pipeline to rise significantly next year.

Costs related to the project had in November prompted the company to raise its 2022 capital expenditure forecast to about C$9.5 billion ($7.07 billion).

TC Energy now expects “a material increase” in project costs and corresponding funding requirements as it continues to face pressure from rising labor costs and shortages.

The company, however, expects adjusted core earnings for 2023 to be 5% to 7% higher than the previous year.

Despite the challenging macro environment, about 95% of the projected adjusted core earnings are under long-term take-or-pay contracts which provide insulation against rising inflation and interest rates, the company said.

($1 = 1.3441 Canadian dollars)

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