Contractor Aecon settles dispute with Coastal GasLink over pipeline construction

TORONTO — Shares of Aecon Group Inc. fell more than 10 percent after the infrastructure company announced $237 million in one-time charges related to its work on the Coastal GasLink pipeline project and three other large legacy fixed-price projects nearing completion.

Aecon – which was one of the lead contractors on the Coastal GasLink project – said it expected to accept a one-time fee of $127 million for the construction of two sections of the pipeline.

The terms of the settlement agreement are not expected to result in any cash impact for Aecon.

The 670 kilometer Coastal GasLink pipeline – which runs from Dawson Creek, BC to the C LNG processing and export facility, currently located in Kitimat, BC – was completed last fall after five years of construction.

TC Energy Corp., the company behind the project, previously said it was pursuing potential recoveries from contractors after the project’s budget increased from $6.2 billion to $11.2 billion and then increased again to 14, 5 billion dollars during construction.

Aecon said in a press release on Friday that the Coastal GasLink deal allows the company to “close the chapter” on one of the most technically and financially challenging projects in its history.

This report by The Canadian Press was first published on July 2, 2024.

Companies in this story: (TSX:ARE; TSX:TRP)

The Canadian Press