TC Energy Corp. says it expects to take a “substantive” charge when it reports its first-quarter results for 2021 due to the decision by U.S. President Biden to revoke the presidential permit for its Keystone XL pipeline.
The company couldn’t yet say what the size of the charge will be, which it expects to be predominantly non-cash, but that it was assessing its options.
It also noted that the viability of certain projects currently associated with the Keystone XL pipeline was also being reviewed
“While we were disappointed with the recent action to revoke the presidential permit for the Keystone XL pipeline, we have a large and diversified asset base that continues to perform extremely well and are advancing $20 billion of secured capital projects, together with a substantive portfolio of other similarly high-quality opportunities under development,” TC Energy chief executive Francois Poirier said in a statement.
Biden promised in his election campaign to cancel Keystone XL and did so on his first day in office last month.
TC Energy stopped capitalizing costs, including interest during construction, after the decision was announced and said it will evaluate the carrying value of its investment in the pipeline, net of project recoveries.
The company approved spending US$8 billion in the spring of 2020 to complete Keystone XL after the Alberta government agreed to invest about US$1.1 billion (C$1.5 billion) as equity and guaranteed a US$4.2-billion project loan.
The 1,947-kilometre pipeline is designed to carry 830,000 barrels a day of crude oil from Hardisty, Alta., to Steele City, Neb., where it connects with the company’s existing facilities to reach the U.S. Gulf Coast refining centre.
The comments came as TC Energy raised its quarterly dividend to 87 cents per share from 81 cents and reported its fourth-quarter profit rose compared with a year ago.
TC Energy said it earned a profit attributable to common shareholders of $1.12 billion or $1.20 per share on $3.30 billion in revenue for the quarter ended Dec. 31 compared with a profit of $1.11 billion or $1.18 per share on $3.26 billion in revenue a year earlier.
The company said its comparable earnings for the quarter amounted to $1.15 per share, up from $1.03 per share in the fourth quarter of 2019.
Analysts on average had expected an adjusted profit of $1.01 per share and $3.44 billion in revenue, according to financial data firm Refinitiv.