TC Energy expanding U.S. gas network for data centre growth
TC Energy Corp. has green-lit a US$900-million pipeline expansion feeding new natural gas-fired power plants in the U.S. Midwest, where artificial intelligence data centres are ravenous for electricity, as well as major refurbishments at the Bruce Power nuclear plant in Ontario.
The Northwoods project would add 400,000 mmBTU's of capacity to TC's ANR system, which brings natural gas from Texas, Louisiana and Oklahoma to Wisconsin, Michigan, Illinois and Ohio. It is expected to come into service in late 2029 and is backed by 20-year contracts.
The expansion would be done by adding parallel segments of pipe along the existing system as well as additional compression to push more gas through, Tina Faraca, the executive in charge of TC's natural gas pipelines, told analysts on a conference call to discuss the company's first-quarter results.
'We have a really strong record of progressing those types of projects on time and on budget,' she said.
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TC said it's also eyeing opportunities to power data centres being contemplated in Alberta, but chief executive François Poirier expects those would differ from projects it's pursing south of the border.
In the U.S., TC has taken an 'in-front-of-the-meter' approach by providing fuel to big utilities that power the overall grid, as opposed to going 'behind the meter' and supplying a specific customer, like a data centre.
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'Strictly from a pipeline perspective, it's a little bit different in Canada, a little bit more of an 'if you build it they will come' kind of approach,' said Poirier.
'So we are working with producers, developers as well to see what the solution set might look like.'
Data centres are massive operations that require an immense amount of electricity to run and cool off computer servers.
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Alberta's technology minister has said the province hopes to see $100 billion worth of artificial intelligence data centres under construction in the next five years.
Greg Grant, the executive who leads TC's power and energy business, said prospective data centres are looking to connect to a collective 12 gigawatts of electricity in Alberta, about the same size as the province's existing grid
'We've been operating gas transmission, storage (and) power in Alberta for decades so I think that uniquely positions us on how we can quickly bring some of these services to fruition,' he said.
But the company is not looking to set up an independent power plant to serve a data centre customer.
'We're going to be very thoughtful in our approach and of course we must compete for capital among all the other great opportunities,' Grant said.
Also Thursday, TC said its board had decided to move ahead with a major component replacement on Unit 5 at its Bruce Power nuclear plant after receiving approval from the Ontario Independent Electricity System Operator last month.
The $1.1-billion project is expected to begin in the fourth quarter of 2026 with service resuming by early 2030.
Earlier in the day, TC reported $978 million in net income attributable to its common shares for its first quarter, down from $988 million a year earlier.
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It said its profit amounted to 94 cents per share for the quarter ended March 31 compared with a profit of 95 cents per share in the first three months of 2024. Comparable earnings totalled 95 cents per share, down from $1.02 a year earlier.
Revenue for the quarter totalled $3.62 billion, up from $3.51 billion in the first quarter of 2024.
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