TC agrees with most native tribes on Coastal GasLink, conducted for LNG Canada

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An offer of native ownership has been accepted by most of the tribes holding cooperation and benefit agreements with Coastal GasLink (CGL), a gas pipeline that TC Energy Corp. built to supply the ongoing liquefied natural gas (LNG) export terminal in British Columbia (BC).

Sixteen of the 20 tribes agreed to the system, which would supply the LNG Canada facility run by Shell plc.

TC has announced option-to-purchase agreements for a 10% share in the 670-kilometre (416-mile) pipeline with groups formed by potential buyers, which are CGL First Nations LLP and FN CGL Pipeline LP.

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“This investment…will finally begin to change the landscape, aligning the interests of industry and Indigenous peoples throughout the life cycle of a project,” said Saulteau First Nations Chief Justin Napoleon.

The deal would see the tribes join the CGL pipeline consortium owned by TC, Alberta Investment Management Corp. and KKR & Co. Inc., based in New York.

Admission to the industrial group would mark the beginning of the healing of a long-standing indigenous sore spot, Napoleon said.

“For years we have watched industry and governments generate revenue from their project operations, while we live with the impacts.”

The CGL agreement stands out as a “historic milestone”, said Cheslatta Carrier Nation Chief Corrina Leween. “For many of us, this is the first time our nations have been included as owners in a major natural resource project that crosses our territories.”

TC President François Poirier also weighed in,

“Together, as business partners, we have the opportunity to learn, grow and change the way energy is developed in Canada,” he said. “That’s one of the ways we can move reconciliation forward.”

The local pipeline investment options would be exercised when CGL begins deliveries, initially of 2.1 Bcf/d through a 48-inch-diameter network. The pipeline network would have the capacity to move up to 5 Bcf/d.

The exercise price of the native ownership options, other business details, the cost of the project and its target commissioning date were not disclosed. TC reported that construction spending is on the rise and completion is likely delayed.

British Columbia’s public health restrictions on northern industrial activity affected the CGL schedule during the early stages of the Covid-19 pandemic. Protests from an indigenous group that opposes tribal pipeline agreements have also disrupted a remote work site.

The CGL Options Agreement is the fifth Canadian effort by industry and tribal leaders to create permanent Indigenous participation in a major pipeline project.

Early bids, one for native shares in a Mackenzie Valley gas conduit and another for the Northern Gateway and Keystone XL oil export lines, fell through because the projects died.

Along with the CGL deal, Indigenous groups are working on an ownership role in the expansion of the Trans Mountain Pipeline under construction through Alberta and British Columbia.

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