Canada’s TC Energy said on Tuesday CGL had executed a commercial agreement with LNG Canada and CGL customers that declares pipeline commercial in-service for the pipeline.
The deal allows the collection of tolls from customers retroactive to October 2024.
As part of the agreement, TC Energy will receive a one-time payment of $199 million, in recognition of the completion of certain work and settlement of final costs.
In line with the terms of the agreement, this payment is expected to be received three months after LNG Canada declares in-service, but no later than December 15, 2025, TC Energy said.
In October last year, the pipeline achieved 100 percent pipe installation across the entire project route.
In the first phase, the 670-kilometer pipeline will be able to transport 2.1 billion cubic feet of natural gas per day (bcf/d) from Groundbirch, BC, to Kitimat, where the LNG Canada plant is located.
TC Energy said the final project costs remain within the approximately C$14.5 billion ($10,4 billion) cost estimate from last year.
The initial estimated cost to construct the pipeline was C$6.6 billion.
“Coastal GasLink LP continues to pursue cost recoveries from contractors through various proceedings, and while we are unable to quantify with any certainty, expect these efforts are likely to result in net recoveries,” the company said.
“This is another important milestone in support of LNG Canada’s commissioning and safe start-up activities. As LNG Canada has indicated, it remains on track to deliver first cargoes by the middle of 2025,” it said.
LNG Canada commissioning
Last month, Shell’s LNG Canada started cooldown activities at its liquefaction and export terminal in Kitimat, as part of the project’s commissioning and start-up phase.
LNG Canada received a cargo of refrigerants (liquefied petroleum gas) onboard the tanker Gaschem Atlantic.
LNG Canada CEO Jason Klein said in September the project was over 95 percent complete.
Klein noted that LNG Canada introduced natural gas to the facility for the first time, from the new Coastal GasLink pipeline.
He previously said the start-up activities would take more than a year to complete.
The project “remains on track” to ship first cargoes of LNG by the middle of 2025.
Contractor JGC Fluor is constructing the first phase of the giant LNG Canada project that includes two liquefaction trains with a capacity of 14 mtpa in Kitimat, British Columbia.
Besides operator Shell, other partners in the project include Malaysia’s Petronas, PetroChina, Japan’s Mitsubishi Corporation, and South Korea’s Kogas.
In addition to the first phase, the partners are also planning to build the second phase of the giant LNG project.
