TC Energy third-quarter 2021 net income down, earnings up

Nov. 15, 2021

TC Energy Corp. had third-quarter 2021 net income attributable to common shares of $779 million compared with net income of $904 million for the same period in 2020. Comparable earnings for third-quarter 2021 were $1 billion compared with $893 million in 2020.

The company began construction of its 2022 Nova Gas Transmission Ltd. (NGTL) system expansion program during the quarter and continued to develop its US natural gas pipeline network, including its 157-MMcfd WR project expanding the existing ANR Pipeline Co. system. Work on the 2022 NGTL expansion, which received Canadian federal approval in second-quarter 2021, started in September. The project includes 103 miles of new pipeline and one new compressor station, designed to increase incremental capacity. TC Energy expects to put it in service fourth-quarter 2022.

The WR project includes installation of electric motor compressors with fuel switching capabilities for additional reliability to replace existing natural gas-powered compressor units along ANR’s system. TC Energy said that electrification of horsepower for the project would result in about a 43% reduction in CO2-equivalent emissions at the source with full utilization of the electric drives. The company expects to bring WR in service fourth-quarter 2025 at a cost of $800 million.

As a result of scope changes, previous permit delays compared with the original construction schedule and the impacts of the COVID-19 pandemic, including a British Columbia provincial health order, TC Energy continues to expect Coastal GasLink (2.1 bcfd) project costs to increase significantly along with a delay to project completion compared with the original cost and schedule. Coastal GasLink has sought and will continue to mitigate cost increases and schedule delays. Coastal GasLink expects incremental costs will be included in the final pipeline tolls, subject to certain conditions.

Coastal GasLink is in dispute with the 14-million tonne/year LNG Canada project, which it will supply with gas, with respect to the recognition of certain costs and the impacts on schedule. Construction activities continue and TC Energy does not expect suspension of these activities while the parties work toward a resolution.

Mexico’s Federal Electricity Commission (CFE) initiated arbitration in June 2019 regarding the 886-MMcfd Tula-Villa de Reyes natural gas pipeline, disputing fixed capacity payments due to force majeure events. Arbitration proceedings are currently suspended through Dec. 31, 2021, while TC Energy conducts settlement discussions with CFE.