In what could be a precedent-setting case for building pipelines in Canada, the company behind the oft-delayed, over-budget Coastal GasLink pipeline is suing one of its main contractors for more than a billion dollars in construction delays.That’s because Calgary-based TC Energy has filed suit against Pacific Atlantic Pipeline Construction — a subsidiary of Italian contractor Bonatti — for $1.2 billion related to “poor performance” in constructing the 670-km pipeline through the interior of British Columbia.The case will be heard in a Calgary court on December 19..Although the pipeline is now 100% complete, Pacific Atlantic was fired last year after a series of work stoppages and environmental infractions TC says cost more than a billion dollars to find a suitable replacement.“Coastal GasLink is committed to enforcing its contractual rights and is actively pursuing cost recoveries as it is entitled to,” TC said in a statement.Parma-based Bonatti, which claims dozens of engineering and construction projects around the globe in countries such as the Netherlands and Algeria, has complained it was wrongfully dismissed. If upheld, TC could be liable for a similar amount in damages.That would push the final tab for the CGL line — the first to the West Coast in 70 years — well past $15 billion and more than double its original $6.2 billion price tag when construction began in 2018..That’s even before the final tally from a series of protests, blockades, vandalism, the pandemic — and even mudslides — that have plagued the project ever since. At one point, construction workers were forced to use ski lifts to transport pipe sections over steep terrain.Now that it is complete, the pipeline is ready to begin shipping natural gas from northeastern BC and Alberta to Shell Canada’s massive LNG Canada terminal at Kitimat when it comes on stream in 2025.But it also sets a potentially costly precedent for other projects such as the Trans Mountain oil expansion which is more than $20 billion over budget. The Canadian Energy Regulator (CER) will hold hearings starting next year to rule on shipping tolls that producers say recover those additional costs at their expense.
In what could be a precedent-setting case for building pipelines in Canada, the company behind the oft-delayed, over-budget Coastal GasLink pipeline is suing one of its main contractors for more than a billion dollars in construction delays.That’s because Calgary-based TC Energy has filed suit against Pacific Atlantic Pipeline Construction — a subsidiary of Italian contractor Bonatti — for $1.2 billion related to “poor performance” in constructing the 670-km pipeline through the interior of British Columbia.The case will be heard in a Calgary court on December 19..Although the pipeline is now 100% complete, Pacific Atlantic was fired last year after a series of work stoppages and environmental infractions TC says cost more than a billion dollars to find a suitable replacement.“Coastal GasLink is committed to enforcing its contractual rights and is actively pursuing cost recoveries as it is entitled to,” TC said in a statement.Parma-based Bonatti, which claims dozens of engineering and construction projects around the globe in countries such as the Netherlands and Algeria, has complained it was wrongfully dismissed. If upheld, TC could be liable for a similar amount in damages.That would push the final tab for the CGL line — the first to the West Coast in 70 years — well past $15 billion and more than double its original $6.2 billion price tag when construction began in 2018..That’s even before the final tally from a series of protests, blockades, vandalism, the pandemic — and even mudslides — that have plagued the project ever since. At one point, construction workers were forced to use ski lifts to transport pipe sections over steep terrain.Now that it is complete, the pipeline is ready to begin shipping natural gas from northeastern BC and Alberta to Shell Canada’s massive LNG Canada terminal at Kitimat when it comes on stream in 2025.But it also sets a potentially costly precedent for other projects such as the Trans Mountain oil expansion which is more than $20 billion over budget. The Canadian Energy Regulator (CER) will hold hearings starting next year to rule on shipping tolls that producers say recover those additional costs at their expense.
