TC Energy (NYSE:TRP) said it expects to reach the upper end of its 2026 comparable EBITDA guidance range after reporting 12% year-over-year growth in second-quarter comparable EBITDA, supported by higher pipeline utilization, contributions from projects placed in service and strong performance at Bruce Power.
The company is targeting comparable EBITDA at the upper end of its previously disclosed CAD 11.6 billion to CAD 11.8 billion range for 2026. It maintained its 2028 target of CAD 12.6 billion to CAD 13.1 billion, which it said represents approximately 6% annualized growth at the midpoint from 2025 results.
Operational performance supports outlook
Comparable EBITDA increased across all four of the company’s operating businesses:
- Canada Gas: EBITDA increased CAD 38 million, or 4%, due primarily to higher flow-through depreciation on the NGTL and Canadian Mainline systems and higher incentive earnings on NGTL.
- U.S. Natural Gas Pipelines: EBITDA rose CAD 129 million, or 12%, on additional contract sales and higher earnings from ANR and Columbia Gas.
- Mexico: EBITDA increased CAD 90 million, or 28%, reflecting earnings from the May 25 in-service date of Southeast Gateway and higher earnings from Certateos.
- Power and Energy Solutions: EBITDA rose CAD 60 million, or 20%, driven by Bruce Power’s Unit 3 return, strong availability and an annual price increase.
President and Chief Executive Officer François Poirier said Bruce Power returned Unit 3 to service more than seven months ahead of the Independent Electricity System Operator schedule and at an approximately 15% lower cost than Unit 6. He said the results reflected a repeatable refurbishment approach, planning and the use of technology and automation.
Project backlog expands as gas-demand outlook rises
TC Energy placed approximately CAD 2 billion of assets in service in the first half, largely on time and on budget or better, and expects to place another approximately CAD 3.5 billion in service by year-end. The company has sanctioned CAD 3 billion of growth projects year to date, including about CAD 700 million of natural gas pipeline projects announced during the quarter. Those sanctioned projects carry a weighted average unlevered after-tax internal rate of return of approximately 12%, according to management.
The company’s late-stage pending-approval project bucket increased to approximately CAD 7 billion from CAD 6 billion in the prior quarter. O’Donnell said the increase was largely related to the Crossroads project, which he described as slightly more than CAD 1 billion. TC Energy has signed precedent agreements with multiple anchor customers and expects to sanction Crossroads in the fourth quarter.
Its projects in origination now exceed CAD 20 billion, with roughly two-thirds associated with U.S. projects and about two-thirds tied to power generation. Management said much of that potential capital is expected beyond 2030, with sustained growth in investment pace anticipated in 2029 and later.
Poirier said TC Energy’s latest forecast calls for approximately 51 billion cubic feet per day of incremental North American natural gas demand by 2035, a 40% increase from 2025 levels and 11 Bcf per day above its original outlook. Power demand accounts for more than half of the increase, with about 16 Bcf per day of incremental growth expected through 2035. Nearly 70% of the projected demand growth is concentrated in the U.S. Heartland, Alberta and Mexico, regions where the company already operates substantial infrastructure.
Canadian demand and U.S. expansion opportunities
Management said its Canadian outlook includes more than 8 Bcf per day of additional demand by 2035, driven by LNG, industrial activity, power demand and data centers. Tina Faraca, executive vice president and chief operating officer for Natural Gas Pipelines, said TC Energy has about half a dozen offerings in the market totaling roughly 1 Bcf per day of capacity across NGTL receipt and delivery points, including intra-Alberta and export service.
Faraca said the company’s 2029 Greater Edmonton Area offering was fully subscribed, while its 2030-2032 intra-Alberta offering received record participation from data center developers. TC Energy is considering expanding that offering.
In the U.S. Midwest, Faraca said the company sees five to six Bcf per day of demand growth through 2035 and views its Columbia, Crossroads, Northern Border and Great Lakes systems as an integrated and advantaged footprint. The Crossroads expansion is expected to fall within TC Energy’s targeted five-to-seven-times build multiple range.
Management said it remains in discussions with Canadian customers regarding a framework for future NGTL growth investments. Poirier said the company expects to report progress by the end of the year, while noting that the return framework remains to be determined.
Funding priorities and technology initiatives
O’Donnell reaffirmed TC Energy’s commitment to a leverage target of 4.75 times or better. He said the company expects Bruce Power’s major component replacement program to unlock an additional CAD 2 billion to CAD 3 billion annually in growth capital after the final two units complete their refurbishment work in 2031 and 2032.
For the period before that cash-flow inflection, management said it will prioritize EBITDA growth and high-return sanctioned projects while retaining options including capital rotation and capital-market financing if a funding gap emerges. O’Donnell said the company expects 2028 to be the period when it begins taking steps to support potential capital needs in 2029 and 2030.
Poirier also said TC Energy is on track to achieve its near-term target of CAD 100 million in AI-related incremental EBITDA in 2026. The company is currently running proof-of-concept initiatives on relatively small pipeline segments and expects to provide a more detailed outlook on the opportunity by November.
About TC Energy (NYSE:TRP)
TC Energy (NYSE: TRP) is a North American energy infrastructure company headquartered in Calgary, Alberta. Formerly known as TransCanada, the company rebranded as TC Energy to reflect its broad presence across Canada, the United States and Mexico. TC Energy develops, owns and operates a diversified portfolio of energy infrastructure assets that play a central role in the transportation and delivery of energy across the continent.
The company’s principal businesses include long?distance natural gas transmission, liquids (crude oil) pipelines, natural gas storage and power generation.
