TC Energy Advances Coastal GasLink Phase 2 and Closes First Nations Investment Agreement

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The expansion is expected to nearly double Coastal GasLink’s 2.1-Bcf/d capacity through new compression and facility upgrades, while an Indigenous-led partnership gains an economic interest connected to TC Energy’s limited-partner interest in the pipeline.

Published by Allstream Insiders

Allstream Insiders Summary

TC Energy has advanced Coastal GasLink Phase 2 following LNG Canada’s final investment decision on its expansion, and has separately closed an agreement that gives five First Nations an economic interest in the entity holding TC Energy’s limited-partner interest in Coastal GasLink. The two announcements, released September 29 and October 13, describe the next capacity expansion for the British Columbia natural-gas pipeline and a related Indigenous economic-participation transaction.

According to TC Energy’s September announcement, Phase 2 will nearly double the approximately 2.1 billion cubic feet per day currently transported by Coastal GasLink. The project is planned around new compressor stations and facility upgrades along the existing 670-kilometre route from Dawson Creek to the LNG Canada facility in Kitimat, British Columbia.

In its October announcement, TC Energy said Haisla Nation, Halfway River First Nation, McLeod Lake Indian Band, Saulteau First Nations and West Moberly First Nations will participate through FN CGL Pipeline Limited Partnership. The arrangement is distinct from the Phase 2 construction plan: it concerns an economic interest in the entity holding TC Energy’s limited-partner interest in Coastal GasLink.

What Coastal GasLink Phase 2 will add

Coastal GasLink Phase 2 is expected to increase capacity without adding a new pipeline route. TC Energy said the work will add compressor stations and upgrade facilities on the operating 670-kilometre pipeline that carries gas from northeastern British Columbia to LNG Canada in Kitimat.

TC Energy said Coastal GasLink and the company will provide certain technical-advisory and procurement services, together with operational expertise, to support project delivery. The announcement did not identify individual equipment suppliers, construction contractors or bid packages.

How LNG Canada and TC Energy will divide Phase 2 roles

LNG Canada is set to lead construction, while Coastal GasLink retains ownership, operating and permitting responsibilities for the pipeline and associated facilities. TC Energy described this as an integrated execution model established under commercial agreements announced earlier in 2026.

The company expects Phase 2 construction to employ up to 2,100 people at peak across five sites. That figure, along with the early-2027 construction start and early-2030s in-service target, is a company expectation and remains subject to project execution.

Five First Nations gain an economic interest connected to Coastal GasLink

TC Energy closed its agreement with FN CGL Pipeline Limited Partnership, an Indigenous-led investment entity representing five First Nations along the Coastal GasLink corridor. The participating Nations will obtain an economic interest in the entity that holds TC Energy’s limited-partner interest in Coastal GasLink, according to the company’s October 13 announcement.

FN CGL Pipeline Limited Partnership was established by the participating Nations to pursue the investment opportunity. The transaction does not change the construction-management roles announced for Phase 2: LNG Canada remains the planned Phase 2 Execution Manager, while Coastal GasLink remains the owner, operator and permit holder of the pipeline and related facilities.

TC Energy called the completed transaction the first of two planned Indigenous investment transactions related to Coastal GasLink. The company expects a second transaction involving additional First Nations to close in the fourth quarter of 2026.

The Phase 2 decision and the Indigenous investment agreement address different parts of the same pipeline’s next chapter: capacity expansion and economic participation. The September release sets out the physical scope and planned delivery model for additional natural-gas transportation capacity. The October release confirms an ownership-related economic-participation arrangement involving Nations along the corridor.

Neither announcement presents the First Nations transaction as a construction award or as a substitute for the Phase 2 execution plan. Separating those facts is important: the transaction concerns an economic interest associated with TC Energy’s limited-partner interest, while the Phase 2 project remains a compression-and-facility-upgrade program on the existing system.

Allstream perspective: execution and participation are now clearer

Allstream perspective: We combined these updates to give readers a more complete view of Coastal GasLink than either announcement provides alone. The project has moved from a conditional decision to a Phase 2 execution plan tied to LNG Canada’s expansion decision, and the related Indigenous investment agreement adds a defined economic-participation element involving five Nations along the pipeline corridor.

For the supply chain, the confirmed project scope is centered on compressor stations and upgrades to existing facilities—not a new 670-kilometre pipeline build. LNG Canada is expected to lead construction, while Coastal GasLink and TC Energy have stated they will provide technical, procurement and operating support. Specific work packages and contractor awards have not been identified in the two announcements.