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TC Energy Approves $2B Pipeline Expansion to Tap Growing Gas Demand
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Key Takeaways
TC Energy approves about $2B in U.S. pipeline projects, adding 2.4 Bcf/d of Midwest capacity by 2030.
AI data centers boost power demand, while 20-year take-or-pay contracts back TC Energy's U.S. expansions.
TC Energy also approves C$4.9B for Coastal GasLink's second phase, lifting capacity to nearly 4.5 Bcf/d.
TC Energy Corporation (TRP - Free Report) is strengthening its North American natural gas infrastructure through new pipeline investments aimed at meeting rising electricity consumption and liquefied natural gas (LNG - Free Report) export demand. The Calgary-based energy infrastructure operator has approved approximately $2 billion in new growth projects, primarily targeting the U.S. Midwest, while also advancing a major expansion of Canada's Coastal GasLink system.
The latest investment decisions bring TC Energy's total sanctioned projects in 2026 to approximately C$6 billion, reflecting its strategy of expanding existing pipeline networks to capture growing natural gas transportation opportunities.
Rising Power Consumption Drives U.S. Pipeline Investments
The rapid expansion of artificial intelligence (AI) infrastructure and data centers is increasing electricity requirements across the United States. Natural gas-fired power generation is expected to play an important role in meeting this demand, creating additional transportation opportunities for pipeline operators.
To capitalize on this trend, TC Energy has authorized the $1.8 billion Crossroads Expansion, which will add approximately 1.4 billion cubic feet per day (Bcf/d) of natural gas transportation capacity to serve the U.S. Midwest.
The company has also approved the $400 million American Midwest project, which will expand its Northern Border pipeline system by another 1 Bcf/d. TC Energy's proportionate equity investment in this project is estimated at approximately $100 million.
Together, these developments will add 2.4 Bcf/d of transportation capacity by 2030. Both projects are supported by 20-year take-or-pay contracts, providing revenue visibility regardless of actual pipeline utilization. The investments also align with TC Energy's expectation that Midwest natural gas demand will increase by more than 5 Bcf/d by 2035.
Beyond domestic electricity demand, TC Energy is positioning its Canadian infrastructure to benefit from increasing international LNG requirements.
Following LNG Canada's positive final investment decision, the company approved the C$4.9 billion second-phase expansion of Coastal GasLink, which transports natural gas from northeastern British Columbia to the LNG Canada export facility in Kitimat.
Instead of constructing an entirely new pipeline, the project will install five compressor stations and make associated facility modifications along the existing corridor. These upgrades will increase firm transportation capacity by approximately 2 Bcf/d to nearly 4.5 Bcf/d.
Construction is scheduled to commence in early 2027, with operations expected to begin in the early 2030s. LNG Canada will oversee construction, while contractual arrangements limit Coastal GasLink LP's exposure to construction expenses, cost overruns and scheduling risks.
This arrangement is particularly significant given the substantial cost escalation and delays experienced during the original Coastal GasLink development. The revised execution structure offers TC Energy a more controlled approach to pursuing additional LNG-linked transportation capacity.
TC Energy's expansion strategy is supported by a business model centered on regulated assets and long-duration commercial agreements. Approximately 98% of the company's earnings are generated through regulated operations or long-term contracts, helping reduce exposure to commodity price fluctuations.
TRP recently raised its 2026 comparable EBITDA guidance to C$11.8-C$12 billion, supported by strong pipeline operations, favorable regulatory settlements and efficient project execution. It also projects comparable EBITDA of C$12.3-C$12.5 billion for 2027 and anticipates compound annual growth of 5%-7% over the subsequent five-year period.
With approximately C$25 billion of projects underway and additional investment opportunities under consideration, TC Energy is building a substantial pipeline of future growth initiatives.
What Lies Ahead for TC Energy?
TC Energy's latest approvals highlight its increasing exposure to two major drivers of North American natural gas consumption: AI-driven electricity requirements and LNG exports.
Management expects North American natural gas demand to rise by approximately 51 Bcf/d between 2025 and 2035, creating opportunities to expand transportation infrastructure across key markets.
The combination of long-term contracted U.S. expansions, additional Canadian LNG infrastructure and risk-sharing arrangements on Coastal GasLink strengthens TC Energy's ability to pursue growth while maintaining financial discipline. Nevertheless, the timing of project completions and the substantial capital requirements remain important factors influencing future returns.
TRP’s Zacks Rank & Key Picks
Calgary, Alberta-based TC Energy is a premier energy infrastructure provider in North America primarily focused on natural gas transmission through its network of pipelines. Currently, TRP has a Zacks Rank #3 (Hold).
Calgary-based Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for CNQ’s 2026 earnings indicates 61.4% year-over-year growth.
Houston, TX-based Cheniere Energy is primarily engaged in the business of liquefied natural gas. It constructs and operates LNG terminal and is also involved in LNG and natural gas marketing. The Zacks Consensus Estimate for LNG’s 2026 earnings indicates 34.4% year-over-year growth.
CVR Energy is an independent refiner and marketer of high-value transportation fuels and a producer of ammonia and urea ammonia nitrate fertilizers. The Zacks Consensus Estimate for CVI’s 2026 earnings indicates 493.4% year-over-year growth.
View the Zacks #1 Rank List
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TC Energy Approves $2B Pipeline Expansion to Tap Growing Gas Demand
Key Takeaways
TC Energy Corporation (TRP - Free Report) is strengthening its North American natural gas infrastructure through new pipeline investments aimed at meeting rising electricity consumption and liquefied natural gas (LNG - Free Report) export demand. The Calgary-based energy infrastructure operator has approved approximately $2 billion in new growth projects, primarily targeting the U.S. Midwest, while also advancing a major expansion of Canada's Coastal GasLink system.
The latest investment decisions bring TC Energy's total sanctioned projects in 2026 to approximately C$6 billion, reflecting its strategy of expanding existing pipeline networks to capture growing natural gas transportation opportunities.
Rising Power Consumption Drives U.S. Pipeline Investments
The rapid expansion of artificial intelligence (AI) infrastructure and data centers is increasing electricity requirements across the United States. Natural gas-fired power generation is expected to play an important role in meeting this demand, creating additional transportation opportunities for pipeline operators.
To capitalize on this trend, TC Energy has authorized the $1.8 billion Crossroads Expansion, which will add approximately 1.4 billion cubic feet per day (Bcf/d) of natural gas transportation capacity to serve the U.S. Midwest.
The company has also approved the $400 million American Midwest project, which will expand its Northern Border pipeline system by another 1 Bcf/d. TC Energy's proportionate equity investment in this project is estimated at approximately $100 million.
Together, these developments will add 2.4 Bcf/d of transportation capacity by 2030. Both projects are supported by 20-year take-or-pay contracts, providing revenue visibility regardless of actual pipeline utilization. The investments also align with TC Energy's expectation that Midwest natural gas demand will increase by more than 5 Bcf/d by 2035.
Coastal GasLink Expansion Strengthens Canada's LNG Connectivity
Beyond domestic electricity demand, TC Energy is positioning its Canadian infrastructure to benefit from increasing international LNG requirements.
Following LNG Canada's positive final investment decision, the company approved the C$4.9 billion second-phase expansion of Coastal GasLink, which transports natural gas from northeastern British Columbia to the LNG Canada export facility in Kitimat.
Instead of constructing an entirely new pipeline, the project will install five compressor stations and make associated facility modifications along the existing corridor. These upgrades will increase firm transportation capacity by approximately 2 Bcf/d to nearly 4.5 Bcf/d.
Construction is scheduled to commence in early 2027, with operations expected to begin in the early 2030s. LNG Canada will oversee construction, while contractual arrangements limit Coastal GasLink LP's exposure to construction expenses, cost overruns and scheduling risks.
This arrangement is particularly significant given the substantial cost escalation and delays experienced during the original Coastal GasLink development. The revised execution structure offers TC Energy a more controlled approach to pursuing additional LNG-linked transportation capacity.
Contracted Infrastructure Supports Long-Term Earnings Visibility
TC Energy's expansion strategy is supported by a business model centered on regulated assets and long-duration commercial agreements. Approximately 98% of the company's earnings are generated through regulated operations or long-term contracts, helping reduce exposure to commodity price fluctuations.
TRP recently raised its 2026 comparable EBITDA guidance to C$11.8-C$12 billion, supported by strong pipeline operations, favorable regulatory settlements and efficient project execution. It also projects comparable EBITDA of C$12.3-C$12.5 billion for 2027 and anticipates compound annual growth of 5%-7% over the subsequent five-year period.
With approximately C$25 billion of projects underway and additional investment opportunities under consideration, TC Energy is building a substantial pipeline of future growth initiatives.
What Lies Ahead for TC Energy?
TC Energy's latest approvals highlight its increasing exposure to two major drivers of North American natural gas consumption: AI-driven electricity requirements and LNG exports.
Management expects North American natural gas demand to rise by approximately 51 Bcf/d between 2025 and 2035, creating opportunities to expand transportation infrastructure across key markets.
The combination of long-term contracted U.S. expansions, additional Canadian LNG infrastructure and risk-sharing arrangements on Coastal GasLink strengthens TC Energy's ability to pursue growth while maintaining financial discipline. Nevertheless, the timing of project completions and the substantial capital requirements remain important factors influencing future returns.
TRP’s Zacks Rank & Key Picks
Calgary, Alberta-based TC Energy is a premier energy infrastructure provider in North America primarily focused on natural gas transmission through its network of pipelines. Currently, TRP has a Zacks Rank #3 (Hold).
Investors interested in the energy sector may consider some top-ranked stocks like Canadian Natural Resources Limited (CNQ - Free Report) , Cheniere Energy, Inc. (LNG - Free Report) and CVR Energy, Inc. (CVI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present.You can see the complete list of today’s Zacks #1 Rank stocks here.
Calgary-based Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for CNQ’s 2026 earnings indicates 61.4% year-over-year growth.
Houston, TX-based Cheniere Energy is primarily engaged in the business of liquefied natural gas. It constructs and operates LNG terminal and is also involved in LNG and natural gas marketing. The Zacks Consensus Estimate for LNG’s 2026 earnings indicates 34.4% year-over-year growth.
CVR Energy is an independent refiner and marketer of high-value transportation fuels and a producer of ammonia and urea ammonia nitrate fertilizers. The Zacks Consensus Estimate for CVI’s 2026 earnings indicates 493.4% year-over-year growth.