TC Energy, Canada’s premier pipeline operator, has reported fourth-quarter adjusted profits that exceeded analysts’ forecasts, driven by record-breaking natural gas flows throughout its extensive North American pipeline network. The surge in demand for natural gas, fuelled by the expansion of liquefied natural gas (LNG) export facilities and the increasing energy needs of data centres, cryptocurrency miners, and advanced AI systems, has positioned the company for robust growth.
Record Natural Gas Flows Fuel Growth
During the last quarter, TC Energy’s pipeline system, which spans an impressive 58,100 miles, delivered more than 30 per cent of the clean-burning fuel consumed daily across North America. The company’s fourth-quarter performance was marked by significant increases in both Canadian and US pipeline deliveries. Canadian natural gas pipeline deliveries averaged 27.2 billion cubic feet per day (bcfpd), reflecting a 5 per cent rise from the previous year, while US pipeline flows surged by 9.5 per cent to reach 29.6 bcfpd. Additionally, deliveries to LNG facilities rose dramatically, jumping 21 per cent to 3.9 bcfpd.
TC Energy’s impressive results underscore the growing reliance on natural gas. Adjusted core profit from its US natural gas pipelines, the company’s largest segment, increased to $1.39 billion, up from $1.2 billion a year earlier. In Canada, adjusted core earnings from natural gas pipelines also saw a notable boost, climbing nearly 13 per cent to $961 million.
Strategic Investments and Future Projections
In a proactive move, TC Energy has placed $8.3 billion worth of projects into service in 2025 and anticipates an additional investment of nearly $4 billion this year. The company recently completed a non-binding open season for 0.5 bcfpd on its Columbia Gas Transmission system, located near Columbus, Ohio. This initiative attracted bids totalling 1.5 bcfpd, three times the capacity originally proposed, highlighting the soaring demand from data centres.
Looking ahead, TC Energy projects its full-year capital expenditure to range between $6.0 billion and $6.5 billion. This strategic investment is expected to further enhance its operational capacity and align with the anticipated growth in natural gas demand.
Consistent Dividend Growth
In addition to its strong earnings report, TC Energy announced a 3.2 per cent increase in its quarterly dividend, raising it to $0.8775 per share. This marks the twenty-sixth consecutive year of dividend growth for the Calgary-based company, reinforcing its commitment to returning value to shareholders even amidst fluctuating market conditions. On an adjusted basis, the company reported earnings of 98 Canadian cents per share, surpassing analysts’ expectations of 92 Canadian cents.
Why it Matters
The results from TC Energy are indicative of broader trends within the energy sector, where the demand for natural gas continues to rise sharply as economies evolve and energy consumption patterns shift. The company’s ability to navigate and capitalise on these trends not only reinforces its position as a market leader but also highlights the critical role natural gas will play in meeting future energy demands. As TC Energy continues to expand its infrastructure and adapt to changing market dynamics, it sets a precedent for other energy operators, ensuring that natural gas remains a vital component of the North American energy landscape.
