TC Energy sees North American LNG exports increase 90% by 2030

TC Energy Corp. now expects North American liquefied natural gas (LNG) exports to reach 25 Bcf/d by 2030, up more than 90% from current levels, according to CEO Francois Poirier.

“As the world faces a serious geopolitical shift, a transition to cleaner energy that also meets global demand is still needed,” Poirier said on a conference call to discuss the giant’s first-quarter results. pipelines based in Calgary.

“North America and TC Energy will play a critical role in securing the world’s energy supply, while transitioning to a low-carbon future.”

TC connects about 25% of gas supply for U.S. LNG exports through its extensive network of pipelines, according to Poirier.

“Going forward, we plan to compete and earn our fair share of LNG market growth,” the CEO said. “We continue to evaluate new potential for expansion and execute our pipeline of sanctioned projects.”

So far this year, the second phase of TC’s 1.1 Bcf/d Grand Cheniere Xpress pipeline has entered service, while the 800 MMcf/d Louisiana Xpress pipeline is expected to be fully commissioned in the coming months . The pipelines service the LNG export facilities of Calcasieu Pass and Sabine Pass of Lousiana respectively.

Additionally, in recent weeks, TC has obtained FERC approval for three pipelines with a combined capacity of approximately 1.4 Bcf/d, all of which are designed to serve LNG exports as well.

Projects approved by the Federal Energy Regulatory Commission include the 700 MMcf/d East Lateral XPress project on TC’s Columbia Gas Transmission system, which would support the proposed second phase of Venture Global Inc’s Plaquemines liquefaction terminal.

The 200 MMcf/d Alberta XPress project is designed to deliver gas to Cheniere Energy Inc’s Sabine Pass LNG facility. TC’s proposed North Baja Xpress project would support Sempra’s planned West Coast Energía Costa Azul liquefaction project from Mexico.

These projects are “just the beginning,” Poirier said. “Our unprecedented pipeline network is critical to delivering LNG volumes today and underscores the huge opportunity we have to connect supply to the growing LNG export market.”

“A Footprint Everywhere”

Also on the call was Stanley Chapman III of TC, president of natural gas pipelines in the United States and Mexico.

He said that “given our extensive network of 13 pipelines that crosses 40 states, we have a footprint everywhere.” Depending on the approval of additional liquefaction expansions, “I could see a scenario where over the next two or three years it’s still 2,000 cfs to 3,000 cfs, maybe 4,000 cfs/d of capacity for the LNG terminals that we are adding to our systems”.

Chapman also discussed plans for the Permian Basin.

“I think it’s likely that you’ll see additional pipeline capacity built directly to Texas Gulf Coast LNG facilities, but not directly to Louisiana Gulf Coast LNG facilities. Instead, you’ll likely see pipelines built from the Permian that will interconnect with our existing infrastructure in Louisiana, where we can leverage our competitive advantage and take advantage of last-mile connectivity.

Chapman also noted the resurgent Haynesville Shale’s growth opportunities that “are not that different from the Permian…so there’s a lot of overlap there.” Facilitating additional supply from Haynesville to boost LNG exports is “something that is really close to our hearts,” Chapman said.

Record natural gas flows

The company’s first quarter results “were supported by strong utilization and reliability of our assets, further supported by the constructive fundamental outlook for North American energy,” management said.

Throughputs on TC’s U.S. pipelines averaged 30,100 cfd, up 5% year-over-year, in the quarter, including a daily record nearly 35,100 cubic feet in January.

Winter demand on the Nova Gas Transmission Line (NGTL) system in Western Canada reached 14.2 Bcf/d, its highest level since 2000.

[Want today’s Henry Hub, Houston Ship Channel and Chicago Citygate prices? Check out NGI’s daily natural gas price snapshot now.]

“Today more than ever, we understand the importance of North America’s role in securing the world’s energy supply,” said Poirier. “Working closely with our clients, we develop long-term strategic partnerships and innovative energy solutions with the goal of sanctioning more than $5 billion in new projects annually, consistent with our historical preferences for risk and performance…

“We are advancing our $25 billion secured capital program and expect to sanction more than $5 billion in new projects annually throughout the decade, including recoverable maintenance capital.” He noted that all of TC’s guaranteed capital projects are underpinned by long-term contracts and/or regulated business models.

Capital revised upwards

TC projects capital spending of $7 billion in 2022, up from an initial forecast of $6.5 billion. The upward revision “is primarily due to higher costs to the NGTL System, reflecting inflationary pressures on labor and materials, additional regulatory conditions and other factors,” management said. . “We continue to work on cost mitigation strategies and assess market conditions, the evolution of our construction projects and the impact of Covid-19 for further modifications to our global capital program for 2022. .”

NGTL’s system placed approximately $200 million in capacity projects into service during the first quarter, management said.

TC said construction is about 63% complete on the 2.1 Bcf/d Coastal Gaslink pipeline, which is intended to supply LNG Canada’s liquefaction terminal under construction in Kitimat, British Columbia.

In Mexico, TC said it plans to complete construction of the 886 MMcf/d Tula-Villa de Reyes pipeline this year, “subject to the successful resolution of ongoing negotiations with neighboring communities to gain access to waiting lands”.

TC’s extensive network of conventional and renewable energy assets includes a 48.4% interest in the Bruce Power nuclear generating station, which provides approximately 30% of Ontario’s electricity.

“Going forward, we remain rich with opportunity and intend to continue to expand, expand and upgrade our existing gas pipeline system, advance Bruce Power’s life extension program and continue our plans of using renewables to power some of our proprietary and aggregated demands,” says Poirier.

He added that “With a focus on capital discipline, we continue to advance our renewable and zero-emissions projects under development…” These include pumped hydro storage, purchase of solar and wind energy, the Alberta Carbon Grid and large-scale hydrogen production. , says Poirier.

TC and Nikola Corp. are also evaluating a plan for a hydrogen production center in Crossfield, Alberta, where TC operates a natural gas storage facility. If sanctioned, the proposed hub could produce 60 metric tons/day of blue hydrogen, that is, hydrogen separated from natural gas, with the resulting carbon dioxide emissions captured. A final investment decision is expected in 2023, TC said.

TC recently announced a collaboration to connect renewable natural gas to a series of transportation hubs on its pipeline network in the United States.

TC reported net income of $358 million (36 cents/share) for the first quarter, compared with a net loss of $1.06 billion (minus $1.11) in the same period last year.

Gordon Jaremko contributed to this story.

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