(Reuters) TC Energy beat second-quarter profit estimates and approved natural gas pipeline expansion projects worth about $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 $214 million on the Central Virginia project to add up to 0.4 bcfpd of capacity on the Columbia Gas system.
It will spend $71 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 $71 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 boosts earnings
TC Energy's second-quarter adjusted earnings of 67 cents per share topped analysts' average estimate of 59 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 $869 million in the second quarter from a year earlier.
Quarterly profit from its Canadian natural gas pipelines business increased about 4.1% to $684 million. Adjusted core profit from TC's Mexican natural gas pipelines business climbed about 28.2% to $291 million.
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The company expects adjusted core profit for 2026 at the upper end of its $8.26 billion to $8.40 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.
