TC Energy, the Canadian midstream developer, announced this Friday a substantial loss for its 1Q financial results, after the suspension of the major midstream project Keystone XL (KXL). The loss reported was for around C$2,2 billion.
Firstly, as we reported previously, the KXL project was supposed to carry 830,000 barrels of oil per day; from Alberta, Canada, to Nebraska, U.S. However, president Joe Biden axed the project on his very first day in office.
Secondly, the project had already undergone at least a decade of delays and controversy issues. Environmental groups and other opposing organizations delayed the project for almost 12 years. Nevertheless, former president Donald Trump promised to revive the project during his term.
Thirdly, indeed, during the Trump administration the project leveraged some tailwinds, both in Canada and the United States. Particularly in Canada, TC Energy managed to sell a $769 million stake in the project to a First Nations community.
Moreover, by January 18, just days before Joe Biden took office, TC Energy pledged to make the project fully powered by renewable energy by 2030. However, Biden’s administration axed the project anyway.
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TC Energy foresees opportunities in other areas of the business
Consequently, TC Energy reported today a C$2,2 billion loss; it said the impairment charge was directly related to the KXL halting, as well as to the reassessment of related projects like the Heartland Pipeline.
Furthermore, CEO of TC Energy, Francois Poirier, said. “We were very disappointed with the decision in January to revoke the presidential permit.” However, he highlighted that the company foresees great opportunity in other areas. Back in January, right after the halting of KXL, he said in a statement.
“Our base business continues to perform very well and, aside from Keystone XL; we are also advancing $25 billions of secured capital projects along with a robust portfolio of other similarly high-quality opportunities under development.”
On the other hand, the company posted a C$2.51 billion loss from its oil pipelines, of which Keystone is the biggest contributor, compared with a C$411 million profit in the same period last year. Attributable to shareholders, TC Energy reported a loss of C$1.1 billion, or C$1.11 per share, in the three months ended March 31 compared with a profit of C$1.1 billion a year earlier.
