Black Diamond Group says it has been given notice to go ahead with a $42.5 million camp to support Coastal GasLink construction, but analysts say this doesn’t necessarily mean the pipeline project will proceed as planned.
The National Energy Board is currently considering whether the pipeline, which would connect northeast B.C. natural gas production to the LNG Canada export facility, requires NEB review in addition to its existing approvals from the B.C. Oil & Gas Commission.
TransCanada does not believe the NEB review is required because the pipeline would exist entirely within the borders of British Columbia, while B.C. resident Mike Sawyer argues that Coastal GasLink would connect with the Nova Gas Transmission Ltd. system, which crosses the Alberta-B.C. boundary and therefore must be regulated by the federal government.
TransCanada submitted evidence late last week highlighting that Coastal GasLink will not be a part of the NGTL system, analysts with GMP FirstEnergy noted on Wednesday.
A review by the NEB would substantially delay the project, which was sanctioned in October 2018 along with LNG Canada, impacting Black Diamond’s 908-bed turnkey camp contract.
“Stepping back, we do not believe the Coastal GasLink announcement is a positive read through indicating that the project will not require a NEB review,” wrote GMP FirstEnergy’s Ian Gillies in a research note.
“We believe TransCanada would begin spending because any capital deployed for this pipeline is fully reimbursable by the LNG Canada consortium.”
Black Diamond also announced a new 304-bed rental contract in Kitimat, B.C. “to support initial infrastructure build out in the region.”