TC Energy raises full-year core profit forecast on natural gas and power demand

By Amanda Stephenson

July 31 (Reuters) - Canadian pipeline operator TC Energy TRP.TO raised its full-year adjusted earnings forecast on Thursday, citing rising demand for natural gas driven by electrification, coal-to-gas conversions and AI data centre growth in North America.

The Calgary, Alberta-based company raised its 2025 adjusted core profit forecast to a range of C$10.8 to C$11.0 billion compared to its previous outlook of C$10.7 to C$10.9 billion.

Its shares rose 1.2% in mid-morning trading to C$65.82.

The company expects to make more capital project announcements this year and into next. Several customers say their data centre-related power generation need will be greater than originally planned, CEO François Poirier said.

"(Natural gas demand) growth is structural and long-term in nature," Poirier said on a conference call with analysts.

Poirier said the new projects expected to get the go-ahead in the coming months will be smaller, brownfield expansions of existing infrastructure as opposed to riskier, large-scale projects.

TC Energy expects to place approximately C$8.5 billion of capital projects into service this year, and Poirier said next year will likely be in the C$6 to C$7 billion range.

He said the company — whose Coastal GasLink pipeline project in Canada was completed in 2023 but dogged by massive cost overruns — will not consider a larger capital program until at least 2028.

TC Energy's total quarterly revenue rose 12% in the second quarter to C$3.74 billion ($2.70 billion), supported by higher adjusted core earnings from Mexican, Canadian and U.S. natural gas pipelines.

Its power and energy solutions business reported an adjusted core profit of C$301 million in the second quarter, up 32.6% from a year ago.

The company operates a 58,100 mile-long network of pipelines, supplying more than 30% of the clean-burning natural gas consumed daily across North America.

It said Thursday it continues to see its greatest opportunity in the U.S., where it has a significant presence in jurisdictions like the U.S. Midwest and Virginia, where there are large clusters of data centers under development.

On an adjusted basis, the company earned 82 Canadian cents per share for the three months ended June 30, beating analysts' average expectation of 78 Canadian cents, according to data compiled by LSEG.

($1 = 1.3849 Canadian dollars)