$3.3 billion in temporary financing. TC Energy signed equity agreements with 16 B.C. First Nations that will provide the communities with a shared 10 per cent ownership stake in the Coastal GasLink pipeline — if the project is completed.
The agreements were signed between the pipeline company and two First Nations coalitions — CGL First Nations Limited Partnership and FN CGL Pipeline Limited Partnership. Both groups represent communities along the pipeline route that had already signed benefit agreements with the company and corresponding agreements with the province.
The March 9 announcement noted all 20 nations with existing agreements were invited to partner on the project. It is unclear why four of the 20 First Nations did not opt in.
It was also not immediately clear whether any of the 16 First Nations would help assume some of the cost overruns of a project that TC Energy says is “significantly” over budget, and behind schedule.
The 670-kilometre pipeline, if completed, would connect the province’s Montney shale gas formation in the northeast to the LNG Canada facility currently under construction on Haisla territory, in Kitimat.
“For years we have watched industry and governments generate revenues from the operations of their projects, while we live with the impacts,” Chief Justin Napoleon of Saulteau First Nations, said in a press release.
Saulteau First Nations territory is in B.C.’s northeast region, a part of the province heavily impacted by decades of industrial activity, including forestry, hydroelectric dams and oil and gas extraction.
“This investment in Coastal GasLink will finally start to shift the landscape, aligning industry and Indigenous peoples’ interests over the entire life cycle of a project,” Chief Napoleon said.
Chief Corrina Leween, of the Cheslatta Carrier Nation in B.C.’s central interior, echoed the sentiment.
“For many of us, this marks the first time that our nations have been included as owners in a major natural resource project that is crossing our territories,” she said in a statement. “This deal is important because it demonstrates the value First Nations can bring as true partners in major projects.”
The equity options in the company would only come into effect after construction is completed and the pipeline begins to transport 2.1 billion cubic feet of natural gas across the province daily. First Nations with signed agreements could then exercise ownership options, pending regulatory approvals and consents, including consent from LNG Canada.
The announcement further distances TC Energy from the pipeline project, which has been contentious since it was first proposed in 2012 and the centre of controversy and conflict since construction began in 2019.
In late 2019, the company sold 65 per cent of its shares in the Coastal GasLink project to U.S.-based private equity company KKR and Alberta Investment Management Corporation (AIMCo) on behalf of AIMCo clients. With the new agreement, TC Energy is allocating 10 per cent of its remaining shares to First Nations.
TC Energy did not respond to The Narwhal’s questions by time of publication, but Bevin Wirzba, president of Coastal GasLink, celebrated the announcement in a statement.
“We recognize that enduring relationships need to include long-term economic opportunities that support the resiliency of Indigenous communities,” Wirzba said. “We continue to learn a great deal from these relationships and value the opportunity to
While the agreements line up 16 First Nations to receive economic benefits after the pipeline is completed, the project’s future remains uncertain.
The pipeline route crosses around 190 kilometres of Wet’suwet’en territory, which the Supreme Court of Canada famously ruled has never been ceded to the Crown, meaning the Wet’suwet’en retain jurisdiction over the land and resources. The company has agreements with five of six elected Wet’suwet’en band councils: Wet’suwet’en First Nation, Skin Tyee, Nee Tahi Buhn, Witset and Ts’il Kaz Koh. Hagwilget elected council did not sign an agreement with Coastal GasLink.
Despite the agreements with elected councils, the Wet’suwet’en Hereditary Chiefs and their supporters staunchly oppose the project.
This opposition led to several clashes with RCMP, including in Nov. 2021, when police arrested more than 30 land defenders and journalists under the authority of a B.C. Supreme Court injunction against anyone who attempts to impede the project. The conflicts garnered international attention and condemnation from the likes of the United Nations Committee on the Elimination of Racial Discrimination, which in 2020 urged Canada to immediately cease the forced eviction of Wet’suwet’en Peoples who oppose the Coastal GasLink pipeline.
In February, Coastal GasLink reported an attack on a key worksite near the Wedzin Kwa (Morice) River on Wet’suwet’en territory, where the company suffered millions in damages to equipment and project infrastructure. RCMP have not made any arrests to date, but say they are investigating.
The Coastal GasLink project has also been facing financial difficulties and TC Energy noted in its most recent quarterly report it remains in dispute with LNG Canada over cost overruns and construction delays.
The company set up a loan agreement for the project which would provide up to $3.3 billion in temporary financing. As of the end of 2021, $238 million in loans was outstanding. It is not clear how this debt will be repaid to TC Energy, nor whether the sale of equity shares will impact the project’s financial standing.