Amid rising demand, TC Energy sets new delivery records and sees an increase in earnings from natural gas
TC Energy Corp., a Canadian pipeline operator, achieved record natural gas deliveries in the first quarter of 2024, driven by a surge in North American electricity demand, according to BNN Bloomberg.
The Calgary-based firm reported that comparable earnings from its natural gas segments in Canada, the US, and Mexico rose to $2.37bn from $2.18bn during the same period last year.
The company noted significant activity on its NGTL system, which channels natural gas from Alberta and northeastern British Columbia to markets in both Canada and the US.
This system recorded an average daily delivery of 15.3 billion cubic feet, an increase from the previous year, and set a new single-day delivery record of 17.3 billion cubic feet.
In the US, TC Energy's natural gas pipelines experienced a daily average flow of 30 billion cubic feet, marking a year-over-year increase of more than five percent.
Records were also set across the company’s US natural gas portfolio, including Columbia Gas, Columbia Gulf, and Great Lakes Gas Transmission.
Deliveries to US power generators climbed by 11 percent, reaching a new quarterly record.
François Poirier, CEO of TC Energy, highlighted the continuous rise in natural gas demand due to increasing electricity requirements, particularly emphasizing the record power burn in the US throughout 2023 and into the current year.
A report by McKinsey & Co. earlier this year forecasted that natural gas would remain crucial in the energy transition, with expected global demand growth of 10 to 15 percent beyond 2030 before it begins to decline.
The anticipated growth is linked to the shift from coal to cleaner-burning natural gas and increased needs from the electrification of buildings, transport, and heavy industries.
Factors such as low natural gas prices, the retirement of coal plants, and the need for reliable backup to intermittent wind and solar generation have fueled this demand.
The US saw a record consumption of 89.1 billion cubic feet per day in 2023, with an average annual increase of four percent since 2018, according to the US Energy Information Administration.
Stanley Chapman, TC Energy's chief operating officer for natural gas pipelines, pointed to emerging data centre demand as a significant driver for future growth. McKinsey & Co. also predicts a 10 percent growth in US data centre power consumption until 2030.
TC Energy reported a first-quarter profit of $1.20bn or $1.16 per share, a decrease from $1.31bn or $1.29 per share in the prior year.
However, revenue saw an increase to $4.24bn from $3.93bn in the first quarter of 2023.
The company disclosed a recent deal to sell its Portland Natural Gas Transmission System to a fund managed by BlackRock and Morgan Stanley Infrastructure Partners, alongside an agreement to sell the Prince Rupert Gas Transmission project to the Nisga’a Nation and Western LNG.
Looking ahead, TC Energy is preparing for the spinoff of its crude oil pipeline business into a separate entity, South Bow Corp., with a shareholder vote scheduled during the annual general meeting on June 4.
