TC Energy Foresees Increased CAPEX in 2023
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TC Energy Foresees Increased CAPEX in 2023

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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Thu, 02/16/2023 - 15:05

The Canadian company TC Energy is foreseeing a 30% year-over-year increase in capital expenditure (CAPEX) in 2023, with the majority of resources allocated to expand natural gas pipelines in the US, Canada and Mexico.

The energy company set a capital budget of between CA$11.5 billion and CA$11.5 billion 12 billion (US$8.55 billion-US$8.92 billion) for 2023, more than the CA$8.96 billion (US$6.66 billion) spent in 2022. François Poirier, President and CEO, TC Energy said that the company remains focused on executing and advancing its major projects, the Coastal GasLink (CGL) and Southeast Gateway natural gas pipelines in Canada and Mexico.

Last year, TC Energy set new records, including peak deliveries in its Canadian and US natural gas systems. Additionally, it formed a unique strategic alliance with the CFE to build the Southeast Gateway Pipeline. In the US, the company increased its share of liquefied natural gas (LNG) feed gas deliveries from 25% to 30%. Furthermore, TC Energy remains on track to increase its market share to 35% by 2025. The company continues to be well-positioned to expand the connection between North America’s premier basins and LNG export facilities to support energy security, reliability and affordability.

“2022 has berecord-settingtting year with continued demand and strong utilization across our systems, which is highlighted by TC Energy's comparable earnings per common share of US$4.30 and comparable EBITDA of US$9.9 billion,” Poirier continued. 

In addition, earnings from the natural gas pipeline segments are expected to increase in 2023 in comparison to 2022. The outlook is driven by expansion projects and contributions from the Villa de Reyes North and Tula East pipelines in Mexico, which came online in 2022.

“Our business remains resilient and is expected to deliver strong comparable EBITDA growth in 2023. We have a defined funding plan in place that will allow us to continue to progress our industry-leading capital program and accelerate our deleveraging target. Reflecting the confidence in our outlook, TC Energy’s Board of Directors has declared a quarterly dividend increase to US$0.93 per common share for the quarter ending March 31, 2023, equivalent to US$3.72 per common share on an annualized basis, an increase of 3.3 percent. This is the twenty-third consecutive year the Board has raised the dividend,” added Poirier.

In Mexico, TC Energy has earmarked CAPEX of US$2.1 billion to advance construction of the Southeast Gateway, Villa de Reyes and Tula pipelines. The company is expecting higher contributions to earnings from its Mexico natural gas pipelines segment, primarily from a renegotiated transport service agreement with state power utility CFE.

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