TC Energy Expands U.S. Gas Infrastructure to Support Data Center Growth in the Midwest
TC Energy Corp. has approved a US$900-million pipeline expansion that will supply new natural gas-fired power plants in the U.S. Midwest, where artificial intelligence data centers have a high demand for electricity. This initiative also includes significant upgrades at the Bruce Power nuclear plant in Ontario.
The Northwoods project aims to enhance TC’s ANR system by adding 400,000 mmBTU’s of capacity. This system transports natural gas from Texas, Louisiana, and Oklahoma to states like Wisconsin, Michigan, Illinois, and Ohio. The project is expected to be operational by late 2029 and is supported by 20-year agreements.
The expansion will involve the addition of parallel pipeline segments along the existing infrastructure and increased compression to facilitate greater gas flow, as explained by Tina Faraca, the executive responsible for TC’s natural gas pipelines, during a conference call regarding the company’s first-quarter results.
“Our track record for completing these types of projects on schedule and within budget is very strong,” she stated.
TC is also exploring opportunities to support data centers proposed in Alberta, though CEO François Poirier noted that these projects might differ from those being pursued in the U.S.
In the U.S., TC adopts an “in-front-of-the-meter” strategy, supplying fuel to large utilities that power the overall grid, rather than “behind the meter,” which would involve serving individual customers like data centers.
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“From a pipeline perspective, the situation in Canada is somewhat different; it leans more towards an ‘if you build it, they will come’ mentality,” Poirier remarked.
“Therefore, we are collaborating with producers and developers to explore potential solutions.”
Data centers are substantial operations that consume enormous amounts of electricity for running and cooling computer servers.
The technology minister of Alberta has stated the province aims to construct $100 billion worth of artificial intelligence data centers within the next five years.
Greg Grant, the executive leading TC’s power and energy business, mentioned that prospective data centers are aiming to connect to a combined total of 12 gigawatts of electricity in Alberta, approximately equivalent to the existing grid in the province.
“Having operated gas transmission, storage, and power in Alberta for decades, we are uniquely positioned to bring these services to fruition swiftly,” he stated.
However, the company does not intend to establish an independent power plant for a data center customer.
“We plan to approach this thoughtfully and, of course, compete for capital alongside many other promising opportunities,” Grant added.
Additionally, TC reported that its board has approved a significant component replacement for Unit 5 at the Bruce Power nuclear plant after receiving the go-ahead from the Ontario Independent Electricity System Operator last month.
This $1.1-billion project is set to commence in the fourth quarter of 2026, with services expected to resume by early 2030.
Earlier, TC announced a net income attributable to its common shares of $978 million for the first quarter, a decrease from $988 million the previous year.
The profit for the quarter was 94 cents per share, compared to 95 cents per share in the first three months of 2024. Comparable earnings reached 95 cents per share, down from $1.02 the prior year.
Quarterly revenue totaled $3.62 billion, an increase from $3.51 billion in the same quarter of 2024.
