The terminus for the Coastal GasLink natural gas pipeline is seen at the LNG Canada export terminal under construction in Kitimat, B.C., on Sept. 28, 2022.DARRYL DYCK/The Canadian Press
TC Energy Corp. TRP-T is talking to Indigenous groups in Alberta and B.C. about a potential deal in which they would acquire a stake in the company’s NGTL natural gas pipeline network.
The company met with some Indigenous communities in Vancouver before Christmas and another meeting is planned in Edmonton next week, said Niilo Edwards, executive director of the B.C.-based First Nations Major Projects Coalition, a group that works with Indigenous communities that are interested in equity positions in major projects that go through their traditional territories.
The coalition is representing at least one B.C. First Nation in the talks and will likely work with more as the process continues, Mr. Edwards said, adding that the potential transaction highlights the need for a federally backed Indigenous loan guarantee program.
“We’re encouraged by this – and the reality is, it should reinforce the need for a government backstop in the form of a federal loan guarantee program,” he said.
Details of the potential agreement have yet to be discussed, Mr. Edwards said. But previous transactions between natural gas companies and Indigenous groups have surpassed the $1-billion mark. In 2022, a consortium of 23 First Nations and Métis communities acquired a minority stake in seven Enbridge Inc. ENB-T crude oil pipelines in Alberta’s northern Athabasca region in a $1.12-billion deal.
The First Nations Major Projects Coalition has for several years been calling for a federally backed Indigenous loan guarantee program that would help Indigenous communities invest in major natural resource projects. Communities face barriers in accessing capital, including Indian Act regulations that make it difficult to provide collateral required to secure a conventional loan.
With Canada on a push to explore for and develop critical minerals and new energy projects, there is also a move for greater Indigenous ownership and control.
Ontario, Alberta and Saskatchewan have launched Indigenous loan guarantee programs.
TC Energy’s B.C. pipeline route bolstered by deal with Ksi Lisims LNG
In its fall economic statement in November, Ottawa said it would work on developing a lending program “to help facilitate Indigenous equity ownership in major projects in the natural resource sector,” with details to come in the 2024 federal budget.
In an e-mailed statement, TC Energy said it wants to create mutually beneficial partnerships with Indigenous communities but declined to provide any further details.
TC Energy’s Nova Gas Transmission Ltd. system is a network of natural gas pipelines in Alberta and northeastern British Columbia, spanning more than 24,600 kilometres.
Selling a stake in NGTL would help Calgary-based TC Energy pay down debt, including expenses related to cost overruns from constructing the 670-kilometre Coastal GasLink project in British Columbia.
Coastal GasLink is operated by TC Energy, which currently owns 35 per cent of the B.C. natural gas pipeline.
The contentious project, which cost $14.5-billion, completed construction in October. It will transport natural gas from northeastern B.C. to LNG Canada’s $18-billion export terminal that’s under construction in Kitimat on the North Coast.
Coastal GasLink’s construction costs were up 30 per cent from 2022′s estimate of $11.2-billion, and up 134 per cent from the original 2018 estimate of $6.2-billion.
TC Energy announced a deal in 2022 under which it agreed to set aside a 10-per-cent stake for a planned equity sale to as many as 20 elected First Nation councils along Coastal GasLink’s route. In 2020, TC Energy sold a 65-per-cent stake in the pipeline venture to Alberta Investment Management Corp. and KKR & Co. Inc.