(Calgary) TC Energy has raised its cost estimate for its Coastal GasLink project to $14.5 billion, up from its previous estimate of $11.2 billion.
The company says the pipeline project continues to face significant cost pressures, including a difficult labor market, contractor underperformance and disputes, and drought conditions and erosion and sediment control issues.
TC Energy indicated that the new estimate did not take into account potential cost recoveries and incorporated provisions for certain factors that may be beyond its control.
The company is targeting mechanical completion of the project by the end of 2023, while commissioning and clean-up work will continue through 2024 and 2025.
However, she said a comprehensive cost and schedule risk analysis estimated that if construction were to extend to 2024, it could add up to $1.2 billion to the cost of the project.
TC Energy has also revised up its overall capital spending plan for 2023 and now expects spending to be between $11.5 billion and $12.0 billion, compared to around $9.5 billion in its previous estimate.