TC Energy beats estimates, approves pipeline expansions
TC Energy reported stronger-than-expected second-quarter profit on Thursday and approved about C$700 million in natural gas pipeline expansion projects across North America.
What Readers Should Know
- TC Energy beat second-quarter profit estimates.
- The company approved pipeline expansion projects worth about C$700 million.
- Two of the projects are in the United States and are aimed at meeting higher power demand.
- TC Energy raised its North American natural gas demand growth forecast for 2035.
- The company expects 2026 adjusted core profit at the upper end of its forecast range.
SEATTLE (Oil Monster): TC Energy (TRP.TO) beat second-quarter profit estimates on Thursday and approved natural gas pipeline expansion projects worth about C$700 million ($498 million) across North America, including two U.S. projects aimed at meeting the rising demand from power generation.
Surging electricity consumption, particularly from AI-driven data centers, has boosted demand for natural gas-fired power plants, prompting pipeline operators such as TC Energy to expand capacity.
The Canadian company forecasts 51 billion cubic feet per day of North American natural gas demand growth by 2035, up from a prior forecast of 46 bcfpd.
TC expects North American natural gas-fired electricity generation to rise from a prior outlook of 54 bcfpd to 60 bcfpd by 2035, said Tina Faraca, TC's chief operating officer for natural gas pipelines.
"Demand favors the U.S. heartland, Western Canada and Mexico, where we have incumbent positions," Faraca said.
TC Energy plans to spend C$300 million on the Central Virginia project to add up to 0.4 bcfpd of capacity on the Columbia Gas system.
It will spend C$100 million on the Clark project to add up to 0.3 bcfpd of pipeline capacity on the Columbia Gulf system for an existing gas-fired power plant.
The company also approved C$100 million to expand its NGTL natural gas pipeline system in Canada.
The NGTL and Clark projects are expected to enter service in 2028, while the Central Virginia project has in-service dates of 2028 and 2030.
Strong pipeline performance
TC Energy's second-quarter adjusted earnings of 94 Canadian cents per share topped analysts' average estimate of 83 Canadian cents, according to data compiled by LSEG.
Adjusted core profit from TC Energy's U.S. natural gas pipelines business, its largest segment, rose 11.8% to C$1.22 billion in the second quarter from a year earlier.
Quarterly profit from its Canadian natural gas pipelines business increased about 4.1% to C$961 million. Adjusted core profit from TC's Mexican natural gas pipelines business climbed about 28.2% to C$409 million.
The company expects adjusted core profit for 2026 at the upper end of its C$11.6 billion to C$11.8 billion forecast.
Canadian natural gas pipeline deliveries averaged 24.2 bcfpd during the quarter, up 1% from a year earlier. U.S. pipeline flows rose 5% to 27 bcfpd, while deliveries to LNG facilities jumped 13% to 3.9 bcfpd.
Courtesy: www.reuters.com
Frequently Asked Questions
What did TC Energy report in the second quarter?
The company beat adjusted earnings estimates, reporting 94 Canadian cents per share versus analysts' average estimate of 83 Canadian cents.
How much did TC Energy approve for pipeline projects?
TC Energy approved about C$700 million in natural gas pipeline expansion projects across North America.
What is driving demand for more pipeline capacity?
The article says rising electricity consumption, especially from AI-driven data centers, is boosting demand for natural gas-fired power plants.
What projects did TC Energy announce?
The company plans to spend C$300 million on the Central Virginia project, C$100 million on the Clark project and C$100 million to expand its NGTL system in Canada.
What is TC Energy's updated demand outlook?
TC Energy now forecasts North American natural gas demand growth of 51 billion cubic feet per day by 2035, up from a prior forecast of 46 bcfpd.