TC Energy said Coastal GasLink Phase 2 will proceed after LNG Canada and its joint venture participants reached a positive final investment decision on the expansion of the LNG Canada facility. The decision satisfies the conditions attached to TC Energy’s previously approved conditional investment decision for the pipeline expansion, moving the project into execution.
Coastal GasLink currently transports approximately 2.1 billion cubic feet per day of natural gas through a 670-kilometre pipeline from the Dawson Creek area to LNG Canada’s liquefaction facility near Kitimat, British Columbia. Phase 2 will nearly double the pipeline’s existing capacity by adding compressor stations and upgrading facilities along the existing route rather than constructing a separate pipeline. TC Energy said construction is expected to begin in early 2027, with the expanded infrastructure targeted to enter service in the early 2030s.
The project is being advanced under commercial agreements announced by TC Energy in March. LNG Canada will serve as the Phase 2 execution manager and lead construction, while Coastal GasLink will remain the owner, operator and permit holder for the pipeline and associated facilities. TC Energy and Coastal GasLink will provide technical advisory, procurement and operational support during the project.
The commercial structure is significant for TC Energy because it limits Coastal GasLink’s capital commitments and exposure to construction cost and schedule risks. TC Energy owns a 35% interest in Coastal GasLink and operates the pipeline, while the remaining ownership is held by its partners. The company has previously emphasized capital discipline and risk allocation as it expands its natural gas infrastructure portfolio.
The latest decision follows several months of work to establish the commercial framework for the expansion. In March, TC Energy said the agreements with LNG Canada provided a pathway toward the final investment decision while limiting Coastal GasLink’s capital commitments and overall liability for construction risks. At that stage, the expansion remained conditional on LNG Canada and its joint venture participants approving the project.
Phase 2 is designed to increase transportation capacity for LNG Canada without adding another major pipeline along the corridor. TC Energy said the additional capacity will allow more Canadian natural gas to reach global LNG markets and identified LNG exports as the largest driver of North American natural gas demand growth in its latest outlook. The company is therefore positioning the expansion as an extension of existing infrastructure rather than a separate pipeline development.
The project also carries potential economic activity in British Columbia. TC Energy said the original Coastal GasLink project generated approximately 25,700 full-time-equivalent jobs during its multiyear construction period and more than $1.8 billion in contracts for Indigenous and local businesses. For Phase 2, the company estimates that as many as 2,100 people could be employed at peak construction across five sites, with additional contracting and training opportunities expected for Indigenous and local communities.
Coastal GasLink is already operating as the connection between Western Canadian natural gas supplies and LNG Canada’s export facility. The pipeline entered commercial service after LNG Canada’s first phase became operational, establishing Canada’s first direct pipeline route for natural gas to a major LNG export terminal. TC Energy has continued to identify LNG infrastructure as an important source of demand growth for its North American natural gas transmission network.
TC Energy cautioned that the expected construction schedule, capacity increase, employment figures and other project benefits are forward-looking information and remain subject to risks and uncertainties. The company said actual results could differ materially from its expectations, and the projected timing and scope of Phase 2 are not guarantees of future performance.
With the LNG Canada investment decision now completed, Coastal GasLink Phase 2 moves from a proposed expansion into the execution stage. The project is expected to increase the utilization and capacity of an existing energy corridor while giving LNG Canada access to additional Canadian natural gas supplies as its own expansion advances.
