TC Energy approves $2 billion pipeline expansion

TC Energy Corporation has approved approximately $2 billion in new growth projects, primarily focused on the U.S. Midwest, as rising electricity consumption and liquefied natural gas (LNG) exports drive demand for natural gas transportation.

The Calgary-based energy infrastructure operator’s two U.S. projects will add a combined 2.4 billion cubic feet per day (Bcf/d) of transportation capacity by 2030. Both are backed by 20-year take-or-pay contracts, providing revenue visibility regardless of how much pipeline capacity customers use.

The approvals bring TC Energy’s total sanctioned projects in 2026 to approximately C$6 billion.

Midwest demand anchors new investments

The larger U.S. investment is the $1.8 billion Crossroads Expansion, which will provide approximately 1.4 Bcf/d of additional natural gas transportation capacity serving the Midwest.

TC Energy also authorized the $400 million American Midwest project to expand its Northern Border pipeline system by another 1 Bcf/d. The company’s proportionate equity investment in that project is estimated at approximately $100 million.

The investments align with TC Energy’s expectation that Midwest natural gas demand will grow by more than 5 Bcf/d by 2035. Expanding artificial intelligence (AI) infrastructure and data centers are increasing U.S. electricity requirements, with natural gas-fired generation expected to play an important role in supplying that power.

Coastal GasLink expansion advances

Alongside its U.S. investments, TC Energy approved the C$4.9 billion second-phase expansion of Coastal GasLink following LNG Canada’s positive final investment decision.

Coastal GasLink carries natural gas from northeastern British Columbia to the LNG Canada export facility in Kitimat. Rather than build a new pipeline, the expansion will add five compressor stations and modify facilities along the existing corridor.

The upgrades will increase firm transportation capacity by approximately 2 Bcf/d to nearly 4.5 Bcf/d. Construction is scheduled to begin in early 2027, with operations expected to start in the early 2030s.

LNG Canada will oversee construction under arrangements that limit Coastal GasLink LP’s exposure to construction expenses, cost overruns and scheduling risks. The structure follows substantial cost increases and delays during the original Coastal GasLink development.

Long-term contracts support growth plans

Approximately 98% of TC Energy’s earnings come from regulated operations or long-term contracts, reducing its exposure to commodity price fluctuations.

The company recently increased its 2026 comparable EBITDA guidance to C$11.8-C$12 billion, citing strong pipeline operations, favorable regulatory settlements and efficient project execution. It projects comparable EBITDA of C$12.3-C$12.5 billion for 2027 and compound annual growth of 5%-7% over the subsequent five-year period.

TC Energy has approximately C$25 billion of projects underway and is considering further investment opportunities. Management expects North American natural gas demand to increase by approximately 51 Bcf/d between 2025 and 2035.

The company’s expansion plans target both electricity generation and LNG exports, while project completion schedules and substantial capital requirements remain important factors influencing future returns.

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