TC Energy Approves $1.5 Billion Expansion Project to Meet Strong U.S. Gas Demand

By Robb M. Stewart

TC Energy has given the go-ahead to a $1.5 billion natural-gas pipeline expansion in the U.S., the latest push by the Canadian energy company to tap strong demand.

TC Energy said it approved an expansion of its Columbia Gas system, an operation bought by the company in 2016 that extends from New York state to the Midwest and Southeast and connects major natural gas basins and markets.

The Appalachia Supply Project extends TC Energy's reach into a corridor that serves multiple high-growth power and industrial markets, and reinforces visibility on incremental growth for the company into the next decade, TC Energy said Friday.

News of the green light for the project was disclosed alongside affirmed guidance for increased underlying earnings this year despite a fall in net income in the first quarter with a decline in earnings from Canadian and U.S. gas pipelines operations.

Market conditions, including sustained growth in natural gas and power demand in the U.S., continue to translate into attractive growth opportunities, President and Chief Executive Francois Poirier said.

The Appalachia project is supported by a 20-year take-or-pay contract backed by utility, TC Energy said. The expansion is designed to provide up to 800 million cubic feet a day of capacity for natural gas-fired power generation and has an expected in-service date in 2030. The project is capable of up to 2 billion cubic feet of gas day through future expansions, which could meet expected demand for electrification, economic development and data centers in the U.S. heartland market, the company said.

The push comes after TC Energy in February launched a nonbinding expansion-project open season seeking commitments from customers for its Crossroads Pipeline system for up to 1.5 billion cubic feet per day of capacity to serve markets in Northern Indiana, Illinois, Iowa and South Dakota. The open season was 2.5 times oversubscribed, it said.

The energy company recorded income attributable to shareholders in the first quarter of 899 million Canadian dollars (US$662 million), or C$0.86 a share, compared with C$978 million, or C$0.94 per share, in the same period a year earlier.

Canadian natural-gas pipelines earnings slipped from a year earlier to C$509 million from C$516 million, and U.S. gas pipelines revenue was C$1.08 billion against C$1.11 billion in 2025. Revenue from Mexico gas pipelines jumped 84% to C$389 million, and revenue from TC Energy's power and energy solutions segment increased 49% to C$201 million.

Comparable earnings before interest, taxes, depreciation and amortization--a measure of profit followed by industry analysts--increased 14% to C$3.09 billion in the quarter. That was slightly ahead of the C$3.05 billion mean forecast of analysts polled by FactSet.

TC Energy in late 2024 completed its exit from its oil-pipeline business, South Bow, to leave it focused on more than 58,000 miles of natural-gas pipeline in Canada, the U.S. and Mexico plus seven power-generation facilities, including the Bruce nuclear plant that supplies roughly 30% of the province of Ontario's electricity.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

05-01-26 0753ET