Post by
AlwaysLong683 on Jul 27, 2023 11:21pm
Coastal Gaslink Error
Water under the bridge, but a disasterous decision nonetheless.
TRP's Iintial Estimated Cost $6.6B
Increased Cost Estimate to $11.2B in July 2022.
Increased Cost Estimate again to $14.5B back in February of this year.
So, all told, the expected costs of Coastal Gaslink increased by almost $8B or more than double (120%) the original estimate.
TRP just sold a 40% stake in a very valuable assets (the Columbia systems) for $5.2B. Suspect this sale was by and large necessitated by this huge cost overrun. Would have been nice if Coastal Gasllink was never initialed, the Columbia systems remained 100% owned by TRP, and the company would have no need for any further asset sales to "deleverage" their Balance Sheet.
Moral of the story: Don't build new pipelines in Canada (see Trans Mountain for another example) or the USA (Keystone XL). TRP has a good thing going building new pipelines in Mexico which are much needed down there, plus upgrades to existing pipelines across Canada and the USA. Hopefully they've learned their lesson. No other way of spinning this.
Comment by
Karl63 on Jul 27, 2023 11:41pm
Can't blame TRP management - remember that planning for the Coastal GasLink, or any pipeline, may well start a decade or more in advance. I don't disagree with anything you've said, but I'd otherwise state the obvious "Hindsight is always 20/20 . . ."
Comment by
AlwaysLong683 on Jul 27, 2023 11:55pm
Agree a new pipeline takes a long lead time to plan, but TRP management could have bailed on the project anytime before their final investment decision. Instead, they green-lighted it with a cost estimate of $6.6B. Mistake.