Calgary-based TC Energy eyes data centre growth as potential opportunity

TC Energy Corp. is eyeing nan accelerated proliferation of data centres successful North America arsenic a business opportunity.

The Calgary-based pipeline institution said Thursday it is uniquely poised to capitalize connected nan accelerated description of electricity-hungry information centres, which are being built by companies for illustration Microsoft, Google, and Amazon to powerfulness nan AI revolution.

Executive vice-president and main operating serviceman Stan Chapman told analysts connected a convention telephone that of nan much than 300 information centres presently nether building aliases projected successful nan U.S., much than 60 per cent are located wrong 80 km of TC Energy’s existing earthy state pipeline system.

“We’re seeing a displacement successful tract preferences (for information centres) from regions wherever large telecom infrastructure is successful spot to regions wherever power and proviso infrastructure is successful place,” Chapman said, adding a increasing number of information centre operators are willing successful building and owning their ain on-site powerfulness generating capacity to reside their precocious energy needs.

There is awesome imaginable for these operators to necktie into TC Energy’s earthy state pipeline system, not conscionable successful nan U.S. but besides successful Mexico and Canada, he said.

“Our best-in-class footprint doesn’t limit nan opportunity group conscionable to nan U.S.,” Chapman added.

“In Canada, there’s astir 300 information centre operations today. We could spot that (power demand) load expanding by 1 to 2 gigawatts earlier nan extremity of nan decade.”

TC Energy, which reported a nett income of $963 cardinal successful nan 2nd quarter, up from $250 cardinal successful nan aforesaid 4th past year, is bullish astir nan early of earthy gas.

Demand for nan commodity is expected to grow, said CEO François Poirier, acknowledgment to nan maturation of nan liquefied earthy state (LNG) manufacture crossed North America, arsenic good arsenic accrued powerfulness demands to support wide-scale electrification, coal-fired retirements and emerging power needs.

“Never person I seen specified beardown prospects for North American earthy state request growth,” Poirier said.

“We are seeing earthy state request scope grounds highs and this is expected to turn by astir 40 cardinal cubic feet per time by 2035.”

Earlier this week, TC Energy announced it has struck a woody to waste a number liking successful its Western Canadian NGTL and Foothills earthy state transmission web to a consortium of Indigenous communities for $1 billion.

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Inclusive of debt, nan woody has a full endeavor worth of $1.65 billion, making it Canada’s largest-ever Indigenous equity ownership agreement.

TC Energy has been seeking to waste disconnected assets to thief salary down its debt, and Poirier said Thursday further deals could beryllium announced soon.

“We do still person immoderate transactions successful market,” he said. “To nan grade that we spot charismatic valuations, we whitethorn see announcing further transactions successful nan 2nd half of 2024.”

During nan 2nd quarter, TC Energy shareholders voted successful favour of nan company’s projected spinoff of its crude lipid pipelines business. The scheme will let TC Energy to attraction connected earthy state infrastructure arsenic good arsenic nuclear, pumped hydro power retention and caller low-carbon power opportunities. The spinoff company, to beryllium called South Bow, will tally nan company’s crude lipid pipelines, including nan captious Keystone pipeline system.

Poirier said Thursday nan spinoff should beryllium completed sometime successful nan early 4th quarter.

TC Energy’s adjusted net came successful astatine $978 million, down somewhat from $981 cardinal for nan aforesaid 4th past year.

Revenues were $4.09 billion, up from $3.83 cardinal for nan aforesaid 4th past year.

The institution declared a dividend of 96 cents per communal share, up from nan 93 cents it declared past year.