CALGARY – While it may have a new name, the company behind the Keystone XL pipeline project between Alberta and the U.S. Gulf Coast is still facing the same challenges getting the project built.
Construction work on the Keystone XL pipeline will not begin this year in the U.S., although it could start in Canada, executives of the company fighting to build the US$8-billion oil pipeline said Friday.
TransCanada Corp. officially dropped the “Canada” from its name, and is now to be called TC Energy Corp., after shareholders approved the change at its annual meeting Friday.
The Calgary-based pipeline giant confirmed it would not be able to start construction on the U.S. portion of the 830,000-barrels-per-day pipeline this year as it has not been able to resolve legal challenges south of the border.
“We have lost the 2019 construction season in the United States,” Paul Mille, TC Energy’s president, liquids pipelines, said on an investor call.
The company could still begin working on the Canadian portion, which has been in regulatory limbo for more than 10 years, and has been authorized by the National Energy Board to begin some construction activities in Alberta and Saskatchewan.
It is also awaiting a Nebraska Supreme Court ruling on the legality of its route through that state.
President and CEO Russ Girling said the company was continuing to “methodically advance” the Keystone XL pipeline and other projects despite those challenges.
He also attempted to soothe local shareholders’ concerns that dropping “Canada” from its name meant a change in focus.
“This is a name change and not a brand change,” Girling said, adding that the company would continue to build pipelines, power plants and energy storage.
The new name better reflects the reach of its operations in Canada, the U.S. and Mexico, he said.
The company has been steadily expanding its business in Mexico, building natural gas pipelines that would move U.S. gas supplies into the Mexican market. It’s U.S. footprint also grew substantially following the company’s US$13-billion acquisition of Columbia Pipeline in 2016.
It has about 7,000 employees in North America, with 3,500 in Canada, 3,200 in the U.S. and 300 in Mexico.
As a result of its expansion south of the Canadian border, there has been speculation in Calgary that the company would relocate its headquarters to Texas. But the company denied it had any such plans.
“The board has no intention of doing that,” TC Energy chair Siim Vanaselja said at the meeting.
The company’s largest projects continue to be focused on the Canadian energy sector, though it has been building pipelines to move U.S.-sourced natural gas into Mexico and expanding its U.S. pipeline system.
In addition to challenges for Keystone XL, the company’s approval for its $6.2-billion Coastal GasLink pipeline project in British Columbia has been appealed and it is expecting a decision on that appeal later this year.
TC Energy also delayed the in-service date for one of its Mexican natural gas pipeline projects called Tula on Friday because of “a lack of progress” by the Mexican government department responsible for Indigenous consultations in that country.
Shares in the company fell 1.2 per cent on Friday to $62.63 as it reported first quarter financial results.
The company reported a quarterly profit of $1 billion of $1.09 per share, up from $734 million or 83 cents per share a year ago.
Revenue for the first quarter totalled $3.49 billion, compared with $3.42 billion in the first quarter of 2018.
On a comparable basis, TransCanada says it earned $987 million or $1.07 per share for the quarter, up from $864 million or 98 cents per share a year ago.
Analysts on average had expected a profit of 99 cents per share, according to Thomson Reuters Eikon.
– with files from The Canadian Press