TC Energy (TRP) Investor Day 2024 summary

Strategic priorities and portfolio transformation

• Transitioned to a focused natural gas and power company, emphasizing high-value, regulated, and repeatable growth projects, with disciplined capital allocation and a $6–$7 billion annual net CapEx limit.

• Completed the spinoff of the liquids pipelines business and integrated gas businesses, enhancing operational efficiency and aligning the portfolio to natural gas and power.

• Achieved $7 billion in asset divestitures and $2.5 billion in capital expenditure reductions (2024–2027), supporting deleveraging from 5.4x (2022) to 4.75x by 2024.

• Maintains a utility-like business model with 97% of cash flows from rate-regulated or take-or-pay contracts, supporting 24 years of consecutive dividend growth and a current yield of ~5.5%.

• Capital allocation is increasingly competitive, with projects required to meet higher risk-adjusted returns and hurdle rates, especially favoring U.S. opportunities.

Growth outlook, projects, and execution

• $32 billion secured capital backlog, with $8.5 billion of assets to be placed in service in 2025, including Southeast Gateway, and four new projects totaling $1.5 billion announced.

• Targeting 5–7% annual EBITDA growth through 2027, with 2025 EBITDA guidance of $10.7–$10.9 billion and 2027 target of $11.7–$11.9 billion.

• Brownfield expansions prioritized for lower risk and higher returns; average sanctioned project IRR has increased from 8.5% to low double digits since 2020.

• Major projects include Coastal GasLink (now in service), Southeast Gateway (mid-2025), Gillis Access, East Lateral XPress, and Bruce Power’s MCR and Project 2030, which will nearly double equity income by early 2030s.

• No new equity issuance planned; funding plan relies on cash flow and regulatory balance sheet capacity.

Market fundamentals and demand drivers

• North American natural gas demand expected to grow by nearly 40 Bcf/d by 2035, driven by LNG exports, power generation, data centers, and coal-to-gas conversions.

• Positioned to compete for 23 Bcf/d of in-corridor growth, with 13 Bcf/d already in development.

• LNG export capacity in North America projected to triple by 2035, with unique positioning across Canada, U.S., and Mexico.

• Data center and industrial electrification trends are accelerating demand for both gas and power, with over 350 data centers planned near pipeline corridors.

• Coal plant retirements and new gas-fired generation, especially in the U.S. and Mexico, are key growth areas, with $2.4 billion invested in coal-to-gas conversions (2025–2029).