Why TC Energy sees renewed opportunity in Canada
Canada poised for LNG export boom
For some years, U.S. projects have been dominating the capital allocations of infrastructure company. But that may be about to change.
As President and CEO François Poirier points out, TC is the only national gas transmission company operating in the U.S., Mexico, and Canada. It's in the latter, in particular, that he notes renewed potential.
"I see an opportunity returning for capital investment in Canada, given the outsized role that it can play in the future of the LNG market," Poirier says.
Geopolitical volatility is forcing countries in Southeast Asia to find alternatives to their traditional supplies in the Middle East or Russia, he points out.
"The west coast of North America has a significant transportation cost advantage to Southeast Asia," he says.
"It's unlikely we'll see permitting of an LNG facility off the west coast of the U.S. – Washington, Oregon, and California are not as supportive of that type of infrastructure, which presents a really exciting opportunity for Canada and Mexico."
There's another reason why Poirier favors Canada at present. He approves of the Carney administration's moves to condense permitting timescales for major energy projects, and to provide political approval earlier in the development process.
"There is definitely a move to improve certainty, and I think that will attract more foreign direct investment into the country," he says.
"I see an opportunity returning for capital investment in Canada, given the outsized role that it can play in the future of the LNG market."
François Poirier, President and CEO, TC Energy
Lifting the capital guardrails
Fresh from marking TC Energy's 75th anniversary, Poirier sees strong tailwinds for the business at present.
TC Energy's pipeline network already supplies more than 30% of the natural gas consumed across North America. Besides its ability to meet rising demand for LNG exports, the company has a strong presence in the U.S. Midwest, where much coal-fired generation is soon to be converted to natural gas.
"We also happen to be within 50 miles of about half of all the datacenters that are under development in the U.S.," Poirier observes.
After several years of relative caution, when it capped capital spend at around $6 billion annually, TC Energy is now in good shape to be bolder with its allocations.
"We're at the point where we're ready to lift the guardrails and allow market demand to determine the size of our capital program," Poirier says.
"We're delivering our projects on time and on budget across all footprint and asset types, and the demand drivers for natural gas transportation and for expanding our nuclear power generation are as good as I've seen in 35 years."
"We're at the point where we're ready to lift the guardrails and allow market demand to determine the size of our capital program."
François Poirier, President and CEO, TC Energy
Relationships count
Poirier believes the business has endured by evolving to master the new skills required by today's energy infrastructure players.
"Back in the mid-90s, to be a strong pipeline company you needed to be able to raise capital cheaply, get your regulatory permits, and be good at construction," he says. "You still need all those things, but you also need to be good at community, indigenous and government relations."
For that reason, one of Poirier's first actions as CEO was to bring in an experienced external affairs executive as a direct report and to sit on the executive team.
Safety and success go hand in hand
TC Energy's cultural values prioritize safety, reliability, and operational discipline, while providing a safe space for its 6,500 employees to innovate and challenge each other, Poirier says.
"Having humility and not a sense of entitlement is extremely important," he adds. "Safety is our most important value.
"It's no accident that while we are currently generating record profits and our asset availability is very high, we've had the strongest safety record the company has seen in six or seven years."
