While TC Energy slightly missed analyst estimates of its third-quarter earnings, the Canada-based pipeline operator expects North American natural gas demand to surge in the medium to long term, thanks to soaring U.S. LNG exports and “unprecedented power demand from data centres and coal-to-gas conversions.”
TC Energy has 58,100 miles of network of natural gas pipelines, which supplies more than 30% of the natural gas consumed daily across North America’s markets.
TC Energy also currently generates approximately 4,650 megawatts (MW) of power-generation capacity, over 75% of which is low carbon emission electricity from nuclear and renewable power sources.
It was the U.S. natural gas and the power solutions segments that saw lower earnings for the third quarter compared to a year earlier, TC Energy’s Q3 report showed.
Earnings in the U.S. natural gas pipelines segment slumped to US$568 million (C$801 million), from US$943 million (C$1.33 billion) a year earlier.
Earnings in the power and energy solutions segment nearly halved from last year.
As a result, TC Energy’s comparable earnings came in at US$0.55 (C$0.77) per common share. This was slightly below the analyst consensus estimate of US$0.56 (C$0.79).
Despite the slight miss, TC Energy sees bright future ahead for its natural gas and power businesses amid rising electricity demand, surging North American LNG exports, and AI and data centers driving additional demand for both natural gas and low-carbon power solutions.
“The outlook for our business continues to be shaped by compelling structural trends across North America’s energy landscape. Growing demand, favourable regulatory momentum, and a clear path to long-term, low-risk growth are reinforcing our confidence in the value we’re delivering to shareholders,” TC Energy’s president and CEO François Poirier said in a statement.
“Our latest forecast expects North American natural gas demand to increase by 45 Bcf/d by 2035, primarily driven by a tripling of LNG exports and unprecedented power demand from data centres and coal-to-gas conversions.”
Top natural gas producers and pipeline operators expect the industry and various U.S. states to accelerate approval and development of natural gas infrastructure as power demand rises.
Natural gas is best positioned to capture most of the growth, according to a Goldman Sachs report from earlier this year.
“Natural gas will benefit significantly from the rising electricity demand and the requirement for 24/7 uninterrupted supply. It is most flexible among all energy sources and an abundant domestic resource,” Goldman Sachs said.
By Michael Kern for Oilprice.com
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