TC Energy Boosts 2020 Capex to Build Keystone XL Pipeline

(Reuters) — TC Energy Corp on Friday beat quarterly profit estimates on higher demand for its natural gas pipelines in the United States and Canada and raised its capital spending budget for the year to build its Keystone XL pipeline

Capital expenditures for 2020 are now expected to be about C$10 billion ($7.14 billion), higher than an earlier projection of C$8 billion ($5.67 billion), as the company spends more on its contentious Keystone XL project.

Keystone XL, which would carry 830,000 barrels per day of crude from Alberta to the U.S. Midwest, has been delayed for more than a decade by opposition from landowners, environmental groups and tribes.

However, the company in March said it would proceed with the $8 billion pipeline with financial backing from the oil-rich province of Alberta, pushing the long-delayed project forward amid a global oil market collapse.

Worldwide restrictions to curb the coronavirus pandemic have slammed demand for oil, with excess supplies further depressing prices. The company on Friday said it is assessing the potential for coronavirus-driven delays to its capital program.

“The availability of our infrastructure has remained largely unimpacted by recent events, with utilization levels robust and in line with historical norms,” said Chief Executive Officer Russ Girling.

Earnings from the company’s Canadian natural gas pipelines rose 8.2% to C$291 million ($206 million), while that from its U.S. natural gas pipelines rose 5.8% to C$838 million ($594 million).

The Calgary, Alberta-based company’s net income attributable to common shares rose to C$1.15 billion ($816 million), or C$1.22 ($.87) per share, in the three months ended March 31, from C$1 billion ($709 million), or C$1.09 ($.77) per share, a year earlier.

Excluding items, TC Energy earned C$1.18 per share, above analysts’ average estimate of C$1.06 ($.75) per share, according to Refinitiv data.

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