Q: 1. What will be the effect on TC Energy stock prices if Coastal Gaslink project price increases by a further $1.2B?
2. What will be the effects on TC Energy stock if TC is forced to reduce operating pressure on Keystone pipeline?
2. What will be the effects on TC Energy stock if TC is forced to reduce operating pressure on Keystone pipeline?
5i Research Answer:
Price predictions are notoriously difficult, but we think investors would be very unhappy with more Coastal cost overruns. Typially, when a company announced bad news as TRP did this year, they should build in some contigences for continued problems. So another bad press release would not be met well, and we would expect at least a 5% hit. On Keystone, regulators want to reduce capacity stresss to 72% from 80%. Consider that TRP has a $15B revenue base, this 10% possible reduction in one line is not likely to be hugely material to the company.