TC Energy sees robust demand ahead as utility customers keep scaling up projects

TC Energy Corp. sees rising energy demand and profit growth in the years ahead as data centres and gas exports rise, but says the higher demand is also making projects more complex.

The company says in its latest financial outlook that it sees earnings before deductions growing at five to seven per cent on an annual, comparable basis through 2028.

The pipeline-focused energy company is, however, holding back on longer-term forecasts — despite requests from shareholders — in part because the growing scale of incoming projects is making it harder to be confident on returns.

“Projects are getting bigger and more complex,” said chief financial officer Sean O’Donnell on an earnings call Thursday.

The company has seen its internal rate of return steadily trend up over the past five years, but it’s taking longer to get clarity on future returns, he said.

“That’s what we want to wait to see. Can we continue to push returns and capital allocation up in the ’29 to ’30 time frame.”

Chief executive François Poirier downplayed any sense that the company was taking on higher risk with the bigger projects, emphasizing that it isn’t talking about multi-jurisdictional, multi-billion dollar projects.

“These are still in-corridor expansions, the average size of our projects in our backlog right now is about half a billion dollars.”

The projects could creep up to around a billion dollars or a little above, but he said he doesn’t see actual execution of the projects getting more complex, more that customers keep scaling up plans, requiring the company to adjust.

“Demand is increasing so quickly that our utility customers are looking to increase the scope of our projects, and we just have to go back to the drawing board a little bit,” Poirier said.

Despite delays, the company says it has already sanctioned more than $5 billion in projects over the past 12 months, including $700 million in projects in the third quarter.

Profits attributable to common shareholders amounted to $609 million or 58 cents per share for the quarter ended Sept. 30, compared with a profit of $1.46 billion or $1.40 per share a year ago.

TC Energy says its 2024 results included a pre-tax gain of $572 million related to the sale of Portland Natural Gas Transmission System that was completed in the third quarter last year.

The company says its comparable earnings from continuing operations amounted to 77 cents per share in its latest quarter compared with 86 cents per share a year earlier.

Analysts had on average expected earnings of 80 cents per share, according to financial markets firm LSEG Data & Analytics.

Revenue totalled $3.70 billion, up from $3.36 billion in the same quarter last year.

This report by The Canadian Press was first published Nov. 6, 2025.

Companies in this story: (TSX:TRP)