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TC Energy Advances Coastal GasLink Phase 2 Expansion Plans
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Key Takeaways
TC Energy's CGL Phase 2 will nearly double pipeline capacity through compressor and facility upgrades.
The integrated model limits CGL's capital commitments and construction cost and schedule risk exposure.
CGL Phase 2 construction is expected to start in 2027, with service targeted for the early 2030s.
TC Energy Corporation (TRP - Free Report) has announced that Coastal GasLink (CGL) Phase 2 will proceed after LNG Canada and its joint venture partners reach a positive final investment decision (FID) on the expansion of the LNG Canada facility. This decision satisfies the conditions tied to TC Energy’s previously approved conditional FID for the project.
The existing CGL pipeline currently transports about 2.1 billion cubic feet per day of natural gas. Phase 2 is expected to nearly double its capacity through new compressor stations and facility upgrades along the existing 670-kilometer route connecting Dawson Creek with the LNG Canada liquefaction facility in Kitimat, British Columbia.
Yesterday, Shell plc (SHEL - Free Report) , through its affiliate Shell Canada Energy, took a final investment decision on the second phase of the LNG Canada project in Kitimat. The decision clears the way for a major expansion that will double the facility’s production capacity and strengthen Shell’s position in the global liquefied natural gas market.
Integrated Execution Model Limits Capital Exposure
The project will follow an integrated delivery model, with LNG Canada serving as the Phase 2 Execution Manager. Meanwhile, CGL will remain the pipeline’s owner, operator and permit holder. TC Energy, currently carrying a Zacks Rank #3 (Hold), and CGL will provide technical, procurement and operational support.
This commercial structure is designed to limit CGL’s capital commitments and exposure to construction cost and schedule risks. For TC Energy, the approach aligns with its focus on disciplined execution, prudent capital allocation and maintaining financial strength.
Expansion Strengthens Canadian LNG Connectivity
The expansion comes as global demand for secure and affordable energy continues to grow. TC Energy’s outlook identifies LNG exports as the largest driver of North American natural gas demand growth over the next decade. CGL Phase 2 will increase transportation capacity for customers without requiring construction of another pipeline, helping connect more Canadian natural gas to LNG Canada.
The broader LNG Canada expansion also supports this growth opportunity. LNG Canada partners approved a Phase 2 expansion that will double the facility’s production capacity to 28 million tons per year from 14 million tons.
Construction Set to Begin in 2027
Construction of CGL Phase 2 is expected to begin in early 2027, with the project anticipated to enter service in the early 2030s. The infrastructure will be operated by TC Energy, which is a co-owner of CGL.
The project is also expected to generate economic opportunities for indigenous and local communities, with up to 2,100 people potentially employed during peak construction across five sites.
Brentwood, TN-based Delek US Holdings is an independent refiner, transporter and marketer of petroleum products. The company’s operations are organized into two reportable segments: Refining and Logistics. The Zacks Consensus Estimate for DK’s 2026 earnings indicates 127.7% year-over-year growth.
Eni, based in Rome, Italy, is an integrated energy company. Its upstream operations cover the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for E’s 2026 earnings indicates 76.9% year-over-year growth.
View the Zacks #1 Rank List
Image: Shutterstock
TC Energy Advances Coastal GasLink Phase 2 Expansion Plans
Key Takeaways
TC Energy Corporation (TRP - Free Report) has announced that Coastal GasLink (CGL) Phase 2 will proceed after LNG Canada and its joint venture partners reach a positive final investment decision (FID) on the expansion of the LNG Canada facility. This decision satisfies the conditions tied to TC Energy’s previously approved conditional FID for the project.
The existing CGL pipeline currently transports about 2.1 billion cubic feet per day of natural gas. Phase 2 is expected to nearly double its capacity through new compressor stations and facility upgrades along the existing 670-kilometer route connecting Dawson Creek with the LNG Canada liquefaction facility in Kitimat, British Columbia.
Yesterday, Shell plc (SHEL - Free Report) , through its affiliate Shell Canada Energy, took a final investment decision on the second phase of the LNG Canada project in Kitimat. The decision clears the way for a major expansion that will double the facility’s production capacity and strengthen Shell’s position in the global liquefied natural gas market.
Integrated Execution Model Limits Capital Exposure
The project will follow an integrated delivery model, with LNG Canada serving as the Phase 2 Execution Manager. Meanwhile, CGL will remain the pipeline’s owner, operator and permit holder. TC Energy, currently carrying a Zacks Rank #3 (Hold), and CGL will provide technical, procurement and operational support.
This commercial structure is designed to limit CGL’s capital commitments and exposure to construction cost and schedule risks. For TC Energy, the approach aligns with its focus on disciplined execution, prudent capital allocation and maintaining financial strength.
Expansion Strengthens Canadian LNG Connectivity
The expansion comes as global demand for secure and affordable energy continues to grow. TC Energy’s outlook identifies LNG exports as the largest driver of North American natural gas demand growth over the next decade. CGL Phase 2 will increase transportation capacity for customers without requiring construction of another pipeline, helping connect more Canadian natural gas to LNG Canada.
The broader LNG Canada expansion also supports this growth opportunity. LNG Canada partners approved a Phase 2 expansion that will double the facility’s production capacity to 28 million tons per year from 14 million tons.
Construction Set to Begin in 2027
Construction of CGL Phase 2 is expected to begin in early 2027, with the project anticipated to enter service in the early 2030s. The infrastructure will be operated by TC Energy, which is a co-owner of CGL.
The project is also expected to generate economic opportunities for indigenous and local communities, with up to 2,100 people potentially employed during peak construction across five sites.
Key Picks
Investors interested in the energy sector may consider some top-ranked stocks like Delek US Holdings, Inc. (DK - Free Report) and Eni S.p.A. (E - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brentwood, TN-based Delek US Holdings is an independent refiner, transporter and marketer of petroleum products. The company’s operations are organized into two reportable segments: Refining and Logistics. The Zacks Consensus Estimate for DK’s 2026 earnings indicates 127.7% year-over-year growth.
Eni, based in Rome, Italy, is an integrated energy company. Its upstream operations cover the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for E’s 2026 earnings indicates 76.9% year-over-year growth.