Understanding Coastal GasLink’s agreement with 16 BC First Nations

TC Energy has signed equity agreements with 16 BC First Nations that will provide communities with a 10% shared interest in the Coastal GasLink pipeline – if the project is completed.

The agreements were signed between the pipeline company and two First Nations coalitions — CGL First Nations Limited Partnership and FN CGL Pipeline Limited Partnership. Both groups represent communities along the pipeline route that had already signed benefit agreements with the company and corresponding agreements with the province.

The March 9 announcement said all 20 countries with existing agreements had been invited to join the project. It is unclear why four of the 20 First Nations did not opt ​​out.

Nor was it immediately clear whether any of the 16 First Nations would help shoulder some of the cost overruns on a project that TC Energy says is “significantly” over budget and behind schedule.

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The 670-kilometre pipeline, if completed, would connect the Montney shale gas formation in the northeast to LNG Canada’s facility currently under construction in Haisla Territory, Kitimat.

“For years, we have watched industry and governments generate revenue from their project operations, while we live with the impacts,” Saulteau First Nations Chief Justin Napoleon said in a statement. hurry.

The Saulteaux First Nations Territory is in the northeastern region of British Columbia, a part of the province heavily impacted by decades of industrial activity, including forestry, hydroelectric dams, and oil and gas extraction. gas.

“This investment in Coastal GasLink will finally begin to change the landscape, aligning the interests of industry and Indigenous peoples throughout the life cycle of a project,” said Chief Napoleon.

Chief Corrina Leween, of the Cheslatta Carrier Nation in British Columbia’s central interior, echoed that sentiment.

“For many of us, this is the first time our nations have been included as owners in a major natural resource project that crosses our territories,” she said in a statement. “This agreement is important because it demonstrates the value that First Nations can bring as true partners in major projects.

Agreements reduce TC Energy’s stake in Coastal GasLink to 25%

The company’s stock options would not take effect until construction is complete and the pipeline would begin transporting 2.1 billion cubic feet of natural gas across the province daily. First Nations with signed agreements could then exercise ownership options, pending regulatory approvals and consents, including the consent of LNG Canada.

The announcement further distances TC Energy from the pipeline project, which has been controversial since its first proposal in 2012 and at the center of controversy and conflict since construction began in 2019.

In late 2019, the company sold 65% of its shares in the Coastal GasLink project to US private equity firm KKR and Alberta Investment Management Corporation (AIMCo) on behalf of AIMCo clients. With the new agreement, TC Energy allocates 10% of its remaining shares to First Nations.

TC Energy did not respond to questions from The Narwhal at press time, but Bevin Wirzba, president of Coastal GasLink, celebrated the announcement in a statement.

“We recognize that lasting relationships must include long-term economic opportunities that support the resilience of Indigenous communities,” Wirzba said. “We continue to learn a lot from these relationships and appreciate the opportunity to become true partners with Indigenous communities throughout the life cycle of this project.

Wet’suwet’en hereditary chiefs still opposed to Coastal GasLink, demand divestment

While the agreements provide for 16 First Nations to receive economic benefits upon completion of the pipeline, the future of the project remains uncertain.

The pipeline route crosses approximately 190 kilometers of Wet’suwet’en territory, which the famous Supreme Court of Canada has ruled was never ceded to the Crown, meaning the Wet’suwet’en retain their jurisdiction over lands and resources. The company has agreements with five of the six elected Wet’suwet’en Band Councils: Wet’suwet’en First Nation, Skin Tyee, Nee Tahi Buhn, Witset and Ts’il Kaz Koh. Hagwilget’s elected council has not signed an agreement with Coastal GasLink.

Despite agreements with elected councils, Wet’suwet’en hereditary chiefs and their supporters fiercely oppose the project.

This opposition has led to several clashes with the RCMP, including in November 2021, when police arrested more than 30 land defenders and journalists under a B.C. Supreme Court injunction against anyone trying to obstruct the project. The disputes have drawn international attention and condemnation from figures like the UN Committee on the Elimination of Racial Discrimination, which in 2020 urged Canada to immediately end the forced eviction of Wet’suwet’en peoples who oppose the Coastal GasLink pipeline.

In February, Coastal GasLink reported an attack on a key construction site near the Wedzin Kwa (Morice) River in Wet’suwet’en territory, where the company suffered millions in damage to project equipment and infrastructure. RCMP have not made any arrests to date, but say they are investigating.

The Coastal GasLink project has also faced financial difficulties and TC Energy noted in its latest quarterly report that it remains in litigation with LNG Canada over cost overruns and construction delays.

The company has put in place a loan agreement for the project that would provide up to $3.3 billion in interim financing. At the end of 2021, $238 million in loans were outstanding. It is not clear how this debt will be repaid to TC Energy, or whether the sale of the shares will have an impact on the financial situation of the project.

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