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A coalition of First Nations along British Columbia’s Coastal GasLink pipeline corridor have signed an option to take a 10% stake in the natural gas pipeline.
TC Energy Corp. (TSX, NYSE: TRP), which is building the natural gas pipeline as part of the LNG Canada project, announced Wednesday that two groups of First Nations representing 16 of the 20 First Nations along the pipeline’s 670-kilometre corridor have signed an option agreement to invest in the pipeline to become part owners.
One group — CGL First Nations Limited Partnership – includes 11 First Nations. That partnership was formed with the help of the First Nations Major Projects Coalition (FNMPC).
The FNMPC said in a news release that the option will be exercised after the pipeline is built and in service. The other group representing the remaining First Nations communities is the FN CGL Pipeline Limited Partnership.
TC has not said how much a 10% equity stake will cost the investors. Under agreement with LNG Canada, TC Energy was to build the CGL pipeline at a cost of C$6.6 billion. However, TC Energy has warned of “significant” cost increases to the project due to scope changes, permitting delays and covid-19 public health orders that affected the project’s workforce.
TC Energy said it would pass the increases onto the LNG Canada partners – something LNG Canada CEO Peter Zebedee has taken issue with.
The equity position that First Nations would take in the pipeline is separate from all the impact benefits agreements that were signed with the 20 First Nations along the pipeline corridor. Those agreements include cash payments and a share of $10 million annually in revenue.
“For years we have watched industry and governments generate revenues from the operations of their projects, while we live with the impacts,” said Chief Justin Napoleon of the Saulteau First Nations, which is one of the members of FN CGL Pipeline Limited Partnership. “This investment in Coastal GasLink will finally start to shift the landscape, aligning industry and Indigenous peoples’ interests over the entire life cycle of a project.”
“For many of us, this marks the first time that our nations have been included as owners in a major natural resource project that is crossing our territories,” said Chief Corrina Leween of the Cheslatta Carrier Nation, which is part of the CGL First Nations Limited Partnership. “This deal is important because it demonstrates the value First Nations can bring as true partners in major projects.”
The pipeline project is 60% complete, according to TC Energy, which plans to reduce its equity share in the pipeline to 35%, with KKR (an American investment company), the Alberta Investment Management Corp. and First Nations owning 65%. TC Energy would remain the pipeline’s operator.
There are eight sections — spreads – along the pipeline corridor from Northeastern B.C. to Kitimat. While two of the eight spreads are reported to have almost 100% of the pipe in the ground, the section in the Morice River area south of Houston, where some members of the Wet’suwet’en First Nation have blockaded the project, CGL reports no pipe has yet been laid.
Last month, a CGL work camp was violently attacked with masked axe-wielding assailants who menaced workers and caused millions of worth of damage to equipment. The RCMP have made no arrests.
(This article first appeared in Business in Vancouver)
