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TC Energy expects annual dividend growth to slow beyond 2021

TC Energy Corp. says it expects its dividend to grow at an annual rate of eight to 10 per cent through 2021, but then growth in its payment to shareholders is expected to slow.
TC Energy Corp. says it expects its dividend to grow at an annual rate of eight to 10 per cent through 2021, but then growth in its payment to shareholders is expected to slow. THE CANADIAN PRESS/Jeff McIntosh

Ongoing court challenges and taller regulatory hurdles that are delaying or preventing new energy pipelines mean TC Energy Corp. will focus its growth on organic expansions going forward, CEO Russ Girling said Tuesday.

The growing opposition to carbon-based fuels, however, doesn’t mean North American demand for those fuels will abate any time soon, he said on a webcast of the company’s annual investor day.

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“As you can see, each of our platforms supplies us with significant opportunities for in-corridor growth and that is our competitive advantage,” Girling said.

“It’s an enviable position to have in a world where demand continues to grow but it is extremely difficult to site new infrastructure.”

He said the company formerly known as TransCanada Corp. has identified over $50 billion of organic growth opportunities, including $30 billion of commercially secured projects.

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Those incremental projects will include expansions to its western Canadian natural gas system, which gathers about 75 per cent of production, as well as the Canadian Mainline that transports that gas to Eastern Canada and the U.S. Northwest.

New liquefied natural gas projects in the U.S. and growing interest in LNG export terminals in Mexico represent other opportunities to expand TC Energy’s natural gas pipeline networks, investors heard.

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The company is forecasting earnings before interest, taxes, depreciation and amortization or EBITDA will exceed $10 billion in 2022, up 16 per cent from $8.6 billion in 2018.

It expects its dividend to grow at an annual rate of eight to 10 per cent through 2021, and then slow to an average annual rate of five to seven per cent.

READ MORE: Keystone pipeline back in service after North Dakota breach: company

TC Energy is the developer of the 830,000-barrel-per-day Keystone XL pipeline expansion to boost export volumes from Alberta to U.S. refineries which is awaiting final permits before being sanctioned for construction.

Earlier this month, the original Keystone pipeline was out of service for almost two weeks after a leak in North Dakota spilled more than 9,000 barrels.