TC Energy approves $1.5 billion Columbia Gas project

(Reuters) Canada's TC Energy approved a $1.5 billion Columbia Gas expansion project after robust performance in its North American operations helped it narrowly surpass first-quarter profit expectations.

The Appalachia Supply Project - expected to start operations in 2030 - is backed by a 20-year contract with a financially strong utility, the company said, and will have the capacity to move up to 0.8 billion cubic feet of natural gas per day to support new gas-fired power plants.

Major pipeline operators like TC Energy are doubling down in anticipation of surging natural gas demand as liquefied natural gas export facilities expand and power-hungry AI systems, cryptocurrency miners and data centers ramp up electricity use.

Natgas demand on the company's Columbia Gas System was up by about 50%, and it expected demand to increase by an additional 4 bcfpd by 2035, CEO Francois Poirier said. 

TC Energy also highlighted strong load growth from power generation and data centres in the U.S. Midwest, with Poirier noting Ohio was emerging as a major hub.

The company's adjusted core profit from the U.S. natural gas pipelines, its largest segment, rose about 10% to $1.1 billion, while earnings from its Canadian natural gas pipelines increased about 3% to $677 million in the reported quarter.

Quarterly adjusted core profit from its Mexico natural gas pipelines business rose 85.4% to $318 million.

It also flagged sharp improvement in long‑term cash generation from its nuclear business.

"By 2030, distributions will begin to meaningfully exceed capital spend," Poirier said. 

He said he expected Bruce Power, TC Energy's nuclear power plant, to generate $736 million of annual free cash flow by 2032, which could increase to $1.5 billion once a major refurbishment program is completed in 2035.

On an adjusted basis, the company earned 73 cents per share for the three months ended March 31, compared with analysts' average estimate of 72 cents per share, according to data compiled by LSEG.