TC Energy tops Q2 profit estimates, approves $498 million in gas pipeline expansions

TC Energy reported second-quarter adjusted earnings of 67 cents per share, beating the average analyst estimate of 59 cents, according to data compiled by LSEG. The company also approved natural gas pipeline expansion projects worth about $498 million across North America, including two U.S. projects tied to rising power-generation demand.

New capacity for gas-fired power plants

Surging electricity consumption, including from AI-driven data centers, has increased demand for natural gas-fired power generation, and pipeline operators including TC Energy are expanding capacity in response. The company will spend $214 million on the Central Virginia project, adding up to 0.4 billion cubic feet per day (bcfpd) of capacity on the Columbia Gas system. It will spend $71 million on the Clark project, adding up to 0.3 bcfpd of capacity on the Columbia Gulf system for an existing gas-fired power plant. TC Energy also approved $71 million to expand its NGTL natural gas pipeline system in Canada. The NGTL and Clark projects are expected to enter service in 2028. The Central Virginia project has in-service dates of 2028 and 2030.

Demand forecast raised

TC Energy now forecasts 51 bcfpd of North American natural gas demand growth by 2035, up from a prior forecast of 46 bcfpd. The company also raised its outlook for North American natural gas-fired electricity generation, to 60 bcfpd by 2035 from a prior 54 bcfpd, said Tina Faraca, TC's chief operating officer for natural gas pipelines. "Demand favors the U.S. heartland, Western Canada and Mexico, where we have incumbent positions," Faraca said.

Segment profit by region

Adjusted core profit from TC Energy's U.S. natural gas pipelines business, its largest segment, rose 11.8% to $869 million in the second quarter from a year earlier. Profit from the Canadian natural gas pipelines business increased about 4.1% to $684 million, and profit from the Mexican natural gas pipelines business climbed about 28.2% to $291 million.

Guidance and pipeline flows

TC Energy expects adjusted core profit for 2026 at the upper end of its $8.26 billion to $8.40 billion forecast. Canadian natural gas pipeline deliveries averaged 24.2 bcfpd during the quarter, up 1% from a year earlier. U.S. pipeline flows rose 5% to 27 bcfpd, and deliveries to LNG facilities jumped 13% to 3.9 bcfpd.