TC Energy is reinforcing its gas midstream network in parts of the country projected to handle a growing number of power-hungry data centers.
Driven by the explosive growth in the artificial intelligence sector (AI), many in the energy sector believe gas-driven power plants will generate the electricity needed to handle the extra load.
“When we look and do the math, we think somewhere between 6 Bcf/d to 8 Bcf/d of increased gas demand between now and 2030 is more than reasonable,” said Stan Chapman, TC Energy’s executive vice president and COO for natural gas pipelines, speaking during the company’s first-quarter earnings call on May 3.
One of the advantages for TC Energy is that many future data centers are expected to be built in Virginia and Wisconsin, states where the company already has a strong presence.
Chapman said the future data centers will demand more natural gas through local distribution companies (LDCs) instead of connecting directly to the mainline pipes of a major midstream network. TC Energy connects to about 10 of the largest LDCs in the U.S.
The projected data center demand increase dovetails with the company’s overall strategy to increase its connectivity with the local networks, specifically in Virginia and Wisconsin. Chapman said the company has announced a “disproportionate amount of the projects … over the past couple of quarters” in the two states.
U.S. electrical demand for data centers is expected to grow by 20%, according to an April report by Wells Fargo analysts. The corresponding demand for natural gas could reach 45 Bcf/d, over the current 35 Bcf/d used for power generation.
TC Energy’s system first-quarter 2024 throughput reached an average of 30 Bcf/d, up 5% over the same period last year. The company’s deliveries to power generators set a first-quarter record with average flows of 2.9 Bcf/d, up by about 11% year-over-year.
The company continued to grow its network in other parts of the U.S. as well.
The CA$410 million (US$300 million) Gillis Access Project, a greenfield pipe network connecting natural gas in the Haynesville Shale’s Gillis hub to markets in Southeast Louisiana, began service in March, said Francois Poirier, TC Energy president and CEO. Overall, the company has placed about CA$1 billion (US$730 million) of projects into service so far this year.
For the quarter, TC Energy reported a comparable EBITDA of $3.09 billion (US$2.26 billion), an 11% increase over first-quarter 2023. The company’s overall revenues also rose by more than CA$300 million (US$219 million) compared with the same period last year, to CA$4.2 billion (US$3.07 billion.)
Recommended Reading
Quantum Capital’s View on AI: Lots of Benefits, Pain Points
2024-05-16 - The energy industry is lagging in the race to implement AI, but Sebastian Gass, CTO of Quantum Capital Group, offered a few solutions during Hart Energy’s 2024 SUPER DUG Conference & Expo.
Aramco Credits Adaptability, Collaboration for Driving Innovation
2024-05-15 - Aramco’s implementation of different approaches has led to the creation and commercialization of newer products, said Max Deffenbaugh, principal scientist for Aramco, at the 2024 Offshore Technology Conference in Houston.
OTC: E&Ps Improving Operational Safety with Digitization
2024-05-13 - Artificial intelligence and the digitization of the oilfield have allowed for several improvements in keeping operators out of harm’s way, panelists said during the 2024 Offshore Technology Conference.
Exclusive: Cost-effective Benefits of Extracting from Mature Assets
2024-05-13 - Baker Hughes' well abandonment leader Bart Joppe details the importance of extracting resources from mature assets and the company's approach to managing a well, in this Hart Energy Exclusive interview.
TGS Starts Up Multiclient Wind, Metaocean North Sea Campaign
2024-05-07 - TGS is utilizing two laser imaging and ranging buoys to receive detailed wind measurements and metaocean data, with the goal of supporting decision-making in wind lease rounds in the German Bright.