AI Data Center Boom Drives Future Gas Demand for TC Energy
(Reuters) — Pipeline operator TC Energy on Thursday beat second-quarter profit estimates helped by higher volumes of natural gas transported through its system and said it expects the AI boom to further fuel demand.
The rapid growth of data centers fueled by generative AI is set to boost U.S. electricity consumption, prompting experts to foresee increased demand for natural gas as a reliable energy source.
The company, on a post earnings call, said that there are about 300 data centers that are currently under construction in the U.S. and more than 60% of these are being built within 50 miles of their pipelines, which would require additional gas of 6 billion cubic feet per day (Bcf/d) to 8 Bcf/d to serve them.
"Data centers are unique opportunity and we're going to pursue them," said a company executive.
For the quarter, its NOVA Gas Transmission system received 14.2 Bcf/d of gas on an average in the reported quarter, up 5% from a year earlier.
TC Energy, which has a long-term debt of about C$49.15 billion as of June 30, is undergoing an overhaul and is in the process of spinning off its oil business to focus on transporting natural gas.
Earlier this week, TC Energy said it will sell a minority stake in its Canadian natural gas pipeline system to Indigenous communities for C$1 billion as part of its plan to reduce debt and fund investments.
Calgary-based TC Energy has announced C$2.6 billion of asset sales up till Thursday, of the C$3 billion asset divestiture target by the end of the year.
The company also said it expects capital expenditures to be at the low-end of its full-year outlook of $8 billion to $8.5 billion.
TC Energy reported an adjusted profit of 94 Canadian cents per share for the quarter ended June 30, compared with analysts' average estimate of 91 Canadian cents per share, according to LSEG data.
Related News
Related News
- Williams' $1 Billion Gas Pipeline Blocked by U.S. Appeals Court, Derailing Five-State Project
- Texas Waha Hub Gas Prices Plunge to Record Lows, Hit Negative Territory
- Williams Begins Louisiana Pipeline Construction Despite Ongoing Legal Dispute with Energy Transfer
- U.S. Buys Nearly 5 Million Barrels of Oil for Emergency Stockpile
- U.S. Appeals Court Strikes Down Controversial Biden Pipeline Safety Rules
- Report: Houston Region Poised to Become a Global Clean Hydrogen Hub
- Exxon Mobil to Start Gas Reserve Seismic Surveys in Greece
- LaPorte, Texas, Issues Shelter in Place After Altivia Plant Leaks Toxic Gas
- Texas Startup Endeavors Again to Build First Major U.S. Oil Refinery Since 1977
- Second Gas Pipeline Rupture in Texas’ Reeves County Raises Environmental Concerns
Comments