As TC Energy Corp. plans to continue investing billions to expand North American natural gas pipeline capacity through the decade, CEO Francois Poirier said political momentum for permitting reform and an appreciation for infrastructure could pave the way for expansions and greenfield projects to boost LNG exports.

On the sidelines of the CERAWeek by S&P Global Conference in Houston, Poirier told NGI that the Calgary-based midstream giant expects to see regulatory support for more infrastructure. Currently, around 75-80% of TC’s investments are connected to natural gas businesses. 

While other energy executives and some regulators at the conference emphasized a need for permitting reforms and more dialogue on the importance of natural gas projects, Poirier said he believed attitudes already were changing, particularly after the invasion of Ukraine. The volatility in Europe helped strike a “balance” between the focus on sustainability and energy security, he added.

“It’s no accident, in my view, that in the United States, both parties are voicing support for reforming the permitting process,” Poirier said. “There is debate around the right way to do that, of course, but both sides acknowledge that it needs to improve because I think it’s a recognition of the understanding that the infrastructure is part of that supply chain of getting natural gas around the world.”

Poirier said while some projects have faced increased opposition, some operators have finished substantial projects by working with stakeholders and regulators. Last year, TC placed $6 billion worth of infrastructure online and plans to launch a similar amount of infrastructure this year.

“I think that is tangible evidence of our ability to actually get projects permitted, built and put into service,” Poirier said. “We all have to be more agile and strong communicators in dealing with the multitude of stakeholders that now want and expect a say in sanctioning of infrastructure.”

Gulf Coast Growth

Through the decade, Poirier said TC aims to boost North American takeaway capacity from a current level of 14 Bcf/d to 21 Bcf/d, a 50% increase. TC expects to hike capital expenditures by roughly 30% year/year this year, mostly focused on gas pipeline expansions.

At the center of those expansions is the Gulf Coast, where Poirier said a combination of mostly brownfield expansions and some strategic newbuilds could help TC grow its U.S. market share by 5% to 35% at the end of the decade.

Last year, TC sanctioned the Gillis Access Project, a 1.5 Bcf/d greenfield system in Louisiana to move more gas from the Haynesville Shale to the coast. Gillis is the “beginning of a header system,” the CEO said, to unlock growth, along with upgrades on the ANR system, as liquefied natural gas demand continues to expand.

“When we look at our system, it’s possible that if we wanted to exceed that 35% market share in the United States and the growth in capacity transpires in the way I described, we would have to be looking at…certainly segments of greenfield projects,” Poirier said. “The key is looking at where expansions need to take place.”

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West Coast Opportunities?

While some reforms may help pave the way for projects in the Gulf Coast, Poirier said, there are still limits to creating more infrastructure on the West Coast. For years, project developers and western producers have advocated for LNG exports from the western United States to help support regional production and forge a swift trade route to Asian markets.

Instead, the route for more North American gas to Asian markets will likely have to come from developing projects in Canada and Mexico.

“I think both Canada and Mexico have recognized an opportunity on the West Coast of the continent that the United States probably can’t capture,” Poirier said.

TC is targeting mechanical completion of its Coastal GasLink project in Western Canada by the end of the year, which would link the Shell plc-led LNG Canada and possibly other facilities to feed gas from the Montney Shale. The company reported in February that crews working on the roughly 416-mile, 2.1 Bcf/d pipeline were progressing on schedule, but warned of inflationary impacts further ballooning the cost of completion.

TC has said rising labor costs in Western Canada could spike project costs of Coastal GasLink by 29%, lifting the price tag to almost $11 billion. TC is maintaining a workforce of around 20,000 construction professionals in Western Canada between its natural gas projects and the crude oil Trans Mountain Pipeline expansion. The total is around twice as many workers as the regional labor market typically supports, Poirier said, leading to competition for skilled workers.

Once Coastal GasLink is operational and feeding LNG terminals on Canada’s Pacific coast, Poirier said he’s confident of the “elasticity of production” from the Western Canada Sedimentary Basin.

“We’re clearly already working on phase two with our customer LNG Canada that would result in an addition of volumes if they sanction the project of trains three and four,” he said. “The basin will be able to backfill that egress very, very easily.”

Meanwhile, in Mexico, TC is solidifying partnerships with Mexico’s state power utility Comisión Federal de Electricidad (CFE). TC expects to spend $2.1 billion this year to advance construction of the Southeast Gateway project, as well as the Villa de Reyes and Tula pipelines.

TC is also working on a 500 MMcf/d expansion to the North Baja XPress system to feed the first phase of Sempra Infrastructure’s Energía Costa Azul LNG export terminal currently under construction after regulators granted approval last year.

Poirier said the growing list of projects with partners in Mexico will build a “backbone of infrastructure” that can help modernize the country’s energy systems and support industry. Further connectivity could also help increase U.S. natural gas pipeline exports to Mexico as proposed LNG projects continue to stack up on the Pacific and eastern coasts.

However, some Mexico energy experts have questioned whether the country has a clear path to support several terminal projects while still building out critical infrastructure. Poirier said the long lifecycle of LNG development and the pace of collaboration with its Mexican partners means demand and financial support from investors will likely determine the initial cap on Mexico’s export volumes, rather than capacity.

“I don’t see development of the linear infrastructure to deliver gas to LNG terminals for export as the bottleneck,” Poirier said. “I see it as being eminently achievable as long as the LNG projects themselves get sanctioned.”