TC Energy Corp., one of the leading natural gas pipeline operators for LNG feed gas and exports to Mexico, is claiming over US$15 billion in damages under the legacy North American Free Trade Agreement (NAFTA) against the Biden Administration for cancelling the Keystone XL oil pipeline project.
TC Energy has filed a Notice of Intent to initiate a NAFTA claim under the United States-Mexico-Canada Agreement to recover economic damages resulting from the revocation of the Keystone XL project’s Presidential Permit first awarded by previous President Donald Trump.
“TC Energy will be seeking to recover more than US$15 billion in damages that it has suffered as a result of the US Government’s breach of its NAFTA obligations,” stated the Calgary, Alberta-based company.
TC Energy said that the Notice of Intent has been filed with the US Department of State’s legal office.
The company’s shares rose to C$61.64 (US$49.70) per share on the Toronto Stock Exchange after the damages claim was filed at the start of the weekend when the USA celebrates Independence Day on July 4.
The Canadian company was following up on a decision by the US to end the Keystone XL pipeline without warning and by presidential decree in January 2021 under the anti-hydrocarbon policies of the Biden Administration.
The 1,947km (1,210-mile) Keystone XL pipeline was designed to deliver 830,000 barrels per day of crude oil from Hardisty in the Canadian province of Alberta to the US state of Nebraska.
It would then have connected with existing facilities to reach US Gulf Coast refiners to meet critical needs for transportation fuel and manufactured products. Keystone XL had been expected to be placed into service in 2023.
TC Energy’s priority project is now likely to be the Canadian Coastal GasLink pipeline to bring feed-gas from the prolific Montney Shale basin in northeast British Columbia to the town of Kitimat on the province’s Pacific Coast.
The pipeline will supply the LNG Canada joint venture led by Royal Dutch Shell and will have a second customer in the form of the Cedar LNG plant to be constructed by the local Haisla First Nation and Pembina Pipeline Corp. on Haisla traditional territory near the Douglas Channel.
Analysts note that TC Energy has made huge investments over the years that have enabled the provision of vital energy to the US, Canada and Mexico.
It partnered with IEnova, the Mexican infrastructure company of Sempra Energy, to construct the South Texas-Tuxpan Pipeline running almost entirely under the Gulf of Mexico for 800 kilometres (497 mile) to deliver clean-burning natural gas to homes and businesses in the southeast Mexican state of Veracruz.
The pipeline was completed in 2019 and has 2.6 billion cubic feet per day of capacity.
Its natural gas comes via the Valley Crossing Pipeline on the US side of the border.
