(Adds details on pipeline project, CEO comment)
Nov 29 (Reuters) - North American oil and gas pipeline company TC Energy Corp on Tuesday forecast higher adjusted core earnings for 2023 and a significant rise in costs related to its long-delayed Coastal GasLink pipeline.
First announced in 2018, the 670-km pipeline is being built to transport natural gas to the LNG Canada facility on the west coast of British Columbia, Canada's first LNG export terminal.
It has faced several delays including COVID disruptions, demonstrations from environmentalists and indigenous First Nations as well as disputes with the Canadian government over costs.
Costs related to the project had prompted TC Energy to raise its 2022 capital expenditure forecast to about C$9.5 billion ($7.07 billion) in November. It now expects "a material increase" in the project's funding requirements too as the company continues to grapple with rising labor costs and shortages.
The pipeline is about 80% complete with mechanical in-service expected by the end of next year, TC Energy said.
The company expects adjusted core earnings for 2023 to be 5% to 7% higher than the previous year.
Despite the challenging macro environment, about 95% of the projected adjusted core earnings are under long-term take-or-pay contracts which insulate it against rising inflation and interest rates, the company said.
"Although Phase One of Coastal GasLink has been challenged by cost performance, we do not expect any impact on the sustainability of our dividend growth rate of 3% to 5% or our ability to accelerate our deleveraging target from 2026," Chief Executive François Poirier said in a statement. ($1 = 1.3441 Canadian dollars) (Reporting by Ruhi Soni and Arshreet Simgh in Bengaluru; Editing by Devika Syamnath)