High on Earnings, TC Energy Plans C$1.2 Billion System Expansion

HOUSTON (P&GJ) — TC Energy announced higher-than-expected third quarter profits as a 55% increase in crude oil transportation earnings partially offset losses from asset sales in the period ended Sept. 30. Citing robust demand, the recently renamed TransCanada also announced that it will proceed with major expansions to its pipeline system. 

Calgary-based TC Energy said it will develop the West Path Delivery Program, a combined C$1.2 billion expansion of its NOVA Gas Transmission Ltd. (NGTL) and Foothills Systems, which will connect with the US$335 million GTN XPress Project recently announced by TC PipeLines LP, to deliver the volumes to downstream markets. 

The West Path Delivery Program is underpinned by approximately 258 MMcf/d of new firm service contracts with terms that exceed 30 years, commencing between the fourth quarter of 2022 and the fourth quarter of 2023. The C$1.2 billion to be invested includes approximately 74 miles (119 km) of pipeline and associated facilities.

“The West Path Delivery Program, along with the GTN XPress Project, further enhances connections of the Western Canadian Sedimentary Basin (WCSB) to high-value downstream markets,” said Russ Girling, president and CEO.

“This $1.2 billion program brings our sanctioned expansions of NGTL and Foothills infrastructure to $10 billion," Girling said, "demonstrating our strong commitment to the long-term viability of the WCSB.”

Earnings from the company's oil-transporting liquids segment, which comprises its 590,000-bpd Keystone pipeline system, surged more than 55% to C$491 million in the third quarter ended Sept. 30.

TC Energy said it earned C$1.04 per share, above the average analyst estimate of 98 Canadian cents per share, according to Reurters, citing IBES data from Refinitiv as its source.

Net income fell to C$739 million from C$928 million in the third quarter of 2018, the company said, as it incurred after-tax losses of C$266 million from the sale of some Columbia Midstream assets and Ontario natural gas-fired power plants.

Energy distributor UGI Corporation announced in early August that its Energy Services subsidiary acquired equity interests of Columbia Midstream Group for $1.275 billion.

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