TC Energy Corp. (TRP) has again raised its long-term outlook for North American natural gas consumption and is evaluating how to deploy its sprawling pipeline network across Canada and the United States to meet the coming surge.
The Calgary-based pipeline operator now expects natural gas demand on the continent to expand by 51 billion cubic feet per day between 2025 and 2035, fueled by liquefied natural gas exports, gas-fired power generation and industrial growth. That marks a sharp upward revision from the 40 bcf/d forecast in late 2024 and the 46 bcf/d estimate as recently as February. “Nearly 70 per cent of this demand growth is concentrated in the U.S. heartland, Alberta and Mexico — regions where TC Energy has a strong incumbent position and significant existing infrastructure,” chief executive François Poirier told analysts on a conference call.
Competition for pipeline space already reflects the intensity of demand. In March, TC Energy offered additional natural gas shipping services in the Greater Edmonton Area, and all the released capacity was immediately absorbed. A subsequent offering for space on its intra-Alberta network for the 2030-to-2032 period drew record participation from data-centre developers, Poirier said. “Given this strong customer interest, we are exploring opportunities to expand this offering to better meet customer demand.”
In the United States, TC Energy expects to make a final investment decision on its Crossroads project in the fourth quarter. Crossroads is a 365-kilometre pipeline in Indiana and Ohio for which the company has announced plans to expand capacity by 1.5 bcf/d. Data disclosed in May showed market interest equivalent to 2.5 times the initial capacity on offer. The company has already signed agreements with some shippers and is in advanced discussions with additional potential customers. Poirier said TC Energy will keep assessing the possibility of widening the project’s scope by bringing in more shippers.
Data-centre development is being treated as a major structural addition to North American gas demand. These facilities house massive computing hardware and have expanded dramatically with the artificial intelligence boom, with some sites consuming enough power each day to supply an entire city. In Canada, data-centre growth is concentrated in Alberta, where the province is actively courting technology giants and prioritising projects that supply their own power generation to avoid straining the grid — power that is predominantly coming from gas-fired plants. While community concerns over pollution, noise, water use and utility bills have surfaced, Poirier said the opposition has not materially hindered the opportunities in front of the company.
The strategic update arrived alongside second-quarter results. Net income attributable to common shareholders rose to C$987 million, up more than 18 per cent from C$833 million a year earlier. Earnings per share were 95 Canadian cents, compared with 80 cents in the same quarter last year. Comparable earnings per share came to 94 cents, up from 82 cents. Revenue climbed to C$3.96 billion from C$3.74 billion.
TC Energy operates roughly 94,000 kilometres of natural gas pipelines spanning Canada, the United States and Mexico, carrying about 30 per cent of the gas consumed across North America and linking producers with utilities, industrial users, LNG terminals and power plants. That last group now carries far greater weight than it once did. Data centres, electrification, manufacturing and LNG exports are jointly driving higher demand for reliable power and gas, positioning the company at the centre of this build-out to collect regulated or contracted revenue from the molecules moving through its network.
Additionally, management has approved the US$1.5 billion Appalachia Supply Project, a Columbia Gas expansion backed by a 20-year agreement, providing a visible catalyst for growth rather than an aspiration on the drawing board.
