TC Energy Corp. expects LNG exports to triple by 2035. (Credit: Todd Korol/The Canadian Press)
TC Energy Corp. expects natural gas demand in North America to soar by 40 billion cubic feet per day over the next decade, driven by growth in liquefied natural gas exports and power generation.
The Calgary-based company said it expects LNG exports to triple to more than 30 Bcf/d by 2035, from around 13 Bcf/d today, led by a doubling of exports from the United States and supported on the margins by Canada’s export volumes jumping to five Bcf/d from zero and Mexico’s climbing to three Bcf/d from 0.5 Bcf/d.
Chief executive François Poirier said the company’s reach into all three markets helps insulate it against regulatory headwinds in any one jurisdiction slowing growth, while acknowledging Canada could slip behind its North American peers for market share.
“We have the benefit of the diversification in all three countries,” Poirier said at TC’s investor day event in Toronto on Tuesday. “I see Mexico potentially surpassing Canada as an exporter of LNG to the world in the next decade or so, and we’re excited about wherever the LNG export growth is going to come from. LNG exports continue to be the largest source of natural gas demand growth going forward.”
North American natural gas demand could reach 160 Bcf/d by 2035, according to the company’s forecast, as more power generation is required to support data centres and as more coal-fired power plants are retired or converted to gas.
Poirier said geopolitical tensions have forced a rebalancing of the energy priorities of governments weighing affordability, reliability and sustainability concerns.
“I feel certain that the governments in North America want to contribute to global energy security,” he said. “Energy security is geopolitical security and so there is a strong focus (to) ensure that the free and democratic world has access to affordable and reliable energy, and we’re confident that North America is going to continue to play a leadership position in supplying the world with that natural gas.”
TC Energy had announced $1.5 billion in new capital spending in 2025 ahead of its first investor day since it completed the spinoff of its crude oil pipeline assets into a standalone company, South Bow Corp., last month.
The company also signalled on Tuesday that it may no longer be offering Indigenous partners a stake in its NGTL System and Foothills Pipeline assets, representing the potential collapse of the largest Indigenous equity deal in Canada’s history.
Last July, TC Energy announced a $1-billion equity interest purchase agreement with a consortium representing the interests of 72 Indigenous communities living near the company’s NGTL pipelines and assets.
That deal was supposed to close in the third quarter, according to Bloomberg, but a bond deal to finance the transaction was delayed and the Indigenous consortium said TC Energy told it that it couldn’t proceed with the transaction or the bond financing.
Poirier said talks continue with the groups and that there was still an opportunity for economic reconciliation, even if it wasn’t in the form of a divestiture.
“It could come in many forms, whether they are relationship agreements or otherwise,” Poirier said. “So, we’re back to the drawing board and working very hard with the communities to come up with a solution, but it may come in a form that’s different from an outright equity ownership interest.”
The company also said it has completed a commercial agreement with LNG Canada and shippers on its Coastal GasLink pipeline that declares commercial in-service for the pipeline and allows for the collection of tolls retroactive to Oct. 1.
As part of the agreement, TC Energy will receive a one-time payment of $199 million in recognition of the work required to complete and settle final costs for the project, which had significant overruns during construction. The company said it does not expect the final price tag to exceed the updated estimate of $14.5 billion.
The controversial 670-kilometre pipeline, which will supply natural gas to Canada’s first LNG export facility when it begins shipping next year, was originally budgeted to cost around $6.6 billion.
“Coastal GasLink LP continues to pursue cost recoveries from contractors through various proceedings, and while we are unable to quantify with any certainty, expect these efforts are likely to result in net recoveries,” TC Energy said in a statement. “This is another important milestone in support of LNG Canada’s commissioning and safe start-up activities. As LNG Canada has indicated, it remains on track to deliver first cargoes by the middle of 2025.”
TC Energy’s $1.5 billion in capital spending next year includes plans to begin two coal-to-gas conversion projects at existing power plants on its Columbia Gulf System in the U.S., which will cost a total of approximately US$800 million over the next five years. Each of the projects is underpinned by 20-year take-or-pay contracts.
The company also sanctioned a $175-million project to boost incremental capacity at its Bruce Power nuclear facility, as it projects electricity demand in Ontario to increase 75 per cent by 2050.
A US$300-million natural gas storage project is also planned for southeast Virginia to serve gas utility customers.
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