Coastal GasLink Phase 2 Greenlit After LNG Canada FID

!TC Energy

TC Energy Corporation (TSX, NYSE: TRP) announced on 29 September 2026 that Coastal GasLink (CGL) Phase 2 will proceed, after LNG Canada and its joint venture participants reached a positive Final Investment Decision on the facility's expansion, satisfying conditions attached to TC Energy's earlier conditional FID. The pipeline currently moves roughly 2.1 Bcf/d of natural gas, and Phase 2 will nearly double that capacity by adding compressor stations and upgrading facilities along the existing 670-kilometre route from Dawson Creek to the LNG Canada liquefaction plant in Kitimat, northern British Columbia. The company did not disclose capital cost or the contracted volumes underpinning the expansion.

Context — why the Coastal GasLink Phase 2 decision matters now

The report frames Phase 2 as an incremental build on infrastructure already in the ground. TC Energy said no additional pipeline will be constructed; the added capacity comes from new compressor stations and facility upgrades on the same route. That structure is the reason the project can be sanctioned without a new right-of-way process.

The catalyst chain is straightforward. LNG Canada's joint venture participants first had to approve the liquefaction expansion, and only then could TC Energy's conditional FID be satisfied. The report states that condition has now been met.

Execution responsibility shifts under commercial agreements announced earlier this year. LNG Canada will lead construction as Phase 2 Execution Manager, while CGL stays the owner, operator and permit holder. TC Energy and CGL will supply technical advisory, procurement and operational support.

That split matters for balance-sheet risk. TC Energy said the commercial structure limits CGL's capital commitments and its overall exposure to construction cost and schedule risk, aligning with its stated priorities of disciplined execution, prudent capital allocation and financial strength.

Macro context from the broader energy complex is visible through the report's own framing rather than outside data. TC Energy's latest outlook identifies LNG exports as the largest driver of North American natural gas demand growth over the next decade. Phase 2 is the physical expression of that view.

Data — what the numbers show

The numbers TC Energy disclosed are capacity, distance, spending history and job counts, not project economics.

Metric	Current / prior	Phase 2 expectation
Pipeline throughput	~2.1 Bcf/d	"nearly double"
Route length	670 km	unchanged route
Peak construction workforce	—	up to 2,100 people across five sites
Indigenous and local contracts awarded to date	more than $1.8 billion	not disclosed
Community investment to date	more than $13 million	not disclosed
Jobs created during original construction	~25,700 FTE	not disclosed

The capacity figure is the headline comparison. Moving from roughly 2.1 Bcf/d toward nearly double implies incremental transportation capacity of a similar magnitude, delivered without new pipe. The report does not state a final post-expansion throughput number, a capital cost, or a tariff structure.

The community and contracting figures belong to the original build, and TC Energy presented them as legacy rather than Phase 2 commitments. For Phase 2 the company said construction is expected to deliver benefits through jobs, contracting, training and skills development, and estimated up to 2,100 people employed at peak across five sites. The report gives no Phase 2 contracting or community-investment target.

The timing figures are forward-looking. TC Energy expects construction to begin in early 2027, with in-service anticipated in the early 2030s. The report does not break out a spending schedule by year.

Analysis — what it means for markets, sectors and tickers

The most direct read-through is to TC Energy itself (TSX, NYSE: TRP). Phase 2 adds transportation capacity on an asset the company already owns and operates, and the report explicitly says the structure limits CGL's capital commitments and construction risk exposure. That combination is unusual for midstream expansion: volume growth without proportionate balance-sheet strain.

Second-order exposure sits with the Western Canada Sedimentary Basin producers that would fill the incremental pipe. TC Energy called the basin "one of the most prolific natural gas resource basins on the planet," and Phase 2 is designed to connect more of that supply to LNG Canada. Producers with existing Gulf Coast and BC Montney positioning are the logical beneficiaries, though the report names none and discloses no contracted volumes.

LNG Canada's joint venture participants carry the construction role and therefore the execution risk on the liquefaction side. The report does not identify the participants or their ownership shares.

Indigenous and local communities along the route are a structural factor rather than a market one. TC Energy said the original pipeline was built with the support of 20 elected Indigenous communities and that long-term agreements remain in place. Those relationships lower permitting friction for an expansion that reuses the existing corridor.

The counter-argument is timing and demand risk. In-service in the early 2030s means the capacity arrives roughly five to six years after the FID, and the demand case rests on TC Energy's own outlook for LNG export growth. If global LNG demand growth slows, the incremental capacity faces a softer market than the outlook assumes. The report offers no downside scenario and no volume commitments.

Positioning follows the structure. TC Energy shareholders get capacity growth with capped construction exposure; the joint venture participants absorb build risk in exchange for liquefaction volume. Flow into Canadian midstream is likely to read the announcement as confirmation that the export build-out continues.

Outlook — what to watch next

Three dated items sit on the calendar. Construction is expected to commence in early 2027. In-service is anticipated in the early 2030s. The LNG Canada expansion FID has already occurred, so the next observable milestones are permitting updates and procurement awards tied to the five construction sites.

Undisclosed items are the ones that would move the numbers. TC Energy has not published a capital cost, a Phase 2 contracting target, or the incremental throughput figure that "nearly double" represents. Any of those disclosures would sharpen the earnings contribution estimate.

Monitoring the broader Canadian energy export complex through Fazen Markets energy coverage gives context on how the export build-out tracks against global demand. The report's own framing — LNG exports as the largest driver of North American gas demand growth over the next decade — is the thesis to test.

Frequently Asked Questions

What does Coastal GasLink Phase 2 mean for TC Energy shareholders?

TC Energy keeps ownership, operation and permitting of the pipeline while LNG Canada leads construction as Phase 2 Execution Manager. The company said this structure limits CGL's capital commitments and exposure to construction cost and schedule risk. Shareholders therefore receive capacity growth without a proportionate increase in build risk. The report does not disclose expected capital spending, earnings accretion, or a timeline for cash flow contribution beyond in-service in the early 2030s.

How much additional natural gas capacity will Coastal GasLink Phase 2 add?

TC Energy said Phase 2 will nearly double the existing capacity of roughly 2.1 Bcf/d. The added capacity comes from new compressor stations and facility upgrades along the same 670-kilometre route, not from new pipeline construction. The report does not state the final post-expansion throughput figure, so the exact incremental volume is not published. The company describes the increase as maximizing the value of an asset underpinned by the Western Canada Sedimentary Basin.