TC Energy sees 33% increase in NorAm gas demand by 2035
Canadian energy infrastructure company TC Energy said November 19 it projects North American natural gas to increase by more than 30% by 2035, reaching 160bn ft3/day from 120bn ft3/day in 2023.
The forecast was a central theme in TC Energy’s annual Investor Day, in which it branded itself a “focused natural gas and power company” in the wake of the spin-off of its liquids pipeline business in October.
“With natural gas and electricity projected to drive 75% of the growth in final energy consumption through 2035, TC Energy’s portfolio of natural gas and power assets strategically align with the vast opportunity we are seeing across our North American footprint,” CEO Francois Poirier said.
With the liquids pipeline business now operating separately as South Bow, TC Energy is free to focus its future on natural gas and power, where wide-spread electrification is seen as a common driver of future demand growth.
TC Energy sees a three-fold increase in LNG exports from North America, ongoing coal-to-gas switching in the US power generation sector and growing data centre demand all contributing to the 40bn ft3/day demand growth forecast.
Demand from new LNG projects is expected to increase by 26bn ft3/day between 2023 and 2035, TC Energy said, noting it has the potential to meet 9bn ft3/day of that growth. And power generation – largely from coal-to-gas conversions and data centres – is forecast to drive up to 12bn ft3/day of demand growth, with TC Energy potentially capable of capturing 8bn ft3/day of that.
The company already has 13bn ft3/day of projects in development to meet future demand and revealed four new growth projects at its Investor Day, including a pair of mainline extensions off its Columbia Gulf System that will facilitate coal-to-gas conversions at two power plants and provide capacity for incremental gas-fired generation.
The US$400mn Pulaski Project and the US$400mn Maysville Project will add a total of 400mn ft3/day of capacity to support coal-to-gas conversion projects at two power plants, and both are expected to be in-service by 2029. Additional coal-to-gas conversion opportunities are available, TC Energy said, with 9 GW of coal-fired generation slated to retire by 2031 located within 15 miles of its assets.
With peak day requirements from local distribution companies expected to grow with the increase in demand, TC Energy also sanctioned the US$300bn Southeast Virginia Energy Storage Project, a liquefied natural gas (LNG) peaking facility that will serve a local distributor’s growing winter peak loads and increase operational flexibility on a critical portion of the Columbia Gas system. The 100mn ft3/day deliverability project has a targeted in-service date of 2030.
And TC Energy’s Bruce Power, a nuclear generating subsidiary serving the Canadian province of Ontario, is progressing its Stage 3a of Project 2030, which will add about 90 MW of incremental capacity at the site, at a cost to TC Energy of about C$175mn.
Finally, TC Energy subsidiary Coastal GasLink (CGL) has executed a commercial agreement with LNG Canada and CGL’s customers – the joint venture owners of the 14mn tonnes/year LNG Canada project – that declares the pipeline commercially in-service, enabling the collection of tolls from CGL customers retroactive to October 1, 2024.
As part of the agreement, TC Energy will receive a one-time payment of C$199mn in recognition of the completion of certain work and the settlement of final costs. The payment will be made within three months of LNG Canada’s in-service declaration, expected by the middle of 2025.