TC Energy commences collection of tolls on Southeast Gateway pipeline

Rhea-AI Summary

TC Energy (NYSE:TRP) has announced the commencement of toll collection from the Comisión Federal de Electricidad (CFE) for its Southeast Gateway pipeline, with May payments received on schedule. The 1.3 Bcf/d, 715-kilometre natural gas pipeline was completed at US$3.9 billion, approximately 13% under the original cost estimate.

The project, completed in less than three years, represents the first major energy infrastructure project under TC Energy's public-private partnership with CFE. The pipeline is strategically positioned to support Mexico's plans to add 8.5 gigawatts of new natural gas power plant capacity, contributing to the country's energy security and economic development.

Positive

• Project completed 13% under original cost estimate at US$3.9 billion
• Successfully commenced toll collection with timely payment received from CFE
• Pipeline capacity of 1.3 Bcf/d positions company for Mexico's planned 8.5 GW power expansion
• Completed ahead of schedule in less than 3 years from final investment decision

Negative

• Pending regulatory approval from CNE required for potential future interruptible service users

Insights

Energy Infrastructure Analyst

TC Energy's Southeast Gateway pipeline now collecting tolls, completed 13% under budget at $3.9B, supporting Mexico's energy growth plans.

TC Energy has hit a significant milestone with the commencement of toll collection from Mexico's Comisión Federal de Electricidad (CFE) for the Southeast Gateway pipeline, with the first payment for May already received. The 715-kilometer natural gas pipeline, with 1.3 Bcf/d capacity, was completed at approximately US$3.9 billion – an impressive 13% under the original cost estimate.

The cost efficiency demonstrates exceptional project management capabilities, especially considering the project's scale and complexity. The 13% savings translates to roughly US$580 million in avoided capital expenditure, which strengthens TC Energy's balance sheet and capital allocation flexibility.

This infrastructure asset positions TC Energy strategically in Mexico's energy market, where the government plans to add 8.5 gigawatts of natural gas power generation capacity. As the first major project under TC Energy's public-private partnership with CFE, the successful execution establishes a blueprint for future collaboration in a high-growth market.

The company is still working with the newly formed Comisión Nacional de Energía to obtain regulated rate approvals for potential future interruptible service users beyond CFE, which could create additional revenue streams. The pipeline's completion in less than three years from final investment decision further demonstrates TC Energy's execution capabilities in bringing complex projects online efficiently.

This operational milestone transforms a capital-intensive construction project into a revenue-generating asset with contracted cash flows, improving TC Energy's return on invested capital while supporting Mexico's transition to lower-emission energy sources.

• Final project cost is approximately US$3.9 billion, 13 per cent under original cost estimate
• Supplies affordable, reliable and sustainable natural gas to fuel Mexico’s economic growth
  

CALGARY, Alberta, June 27, 2025 (GLOBE NEWSWIRE) -- News Release – TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) today announced that it has commenced the collection of tolls from the Comisión Federal de Electricidad (CFE) for the Southeast Gateway pipeline and has been paid by the CFE for the month of May, on time in accordance with our contract. We continue to work with the newly constituted Comisión Nacional de Energía (CNE) to obtain the approval of our regulated rates as soon as possible, which is required to provide service to potential future interruptible service users on Southeast Gateway other than the CFE.

The Southeast Gateway pipeline, a 1.3 Bcf/d, 715-kilometre natural gas pipeline, was constructed approximately 13 per cent under the original cost estimate in less than three years from the project's final investment decision. Southeast Gateway was the first significant energy infrastructure project constructed under our successful public-private partnership with the CFE.

“The successful completion of the Southeast Gateway pipeline reflects the unwavering commitment of our team, the CFE and the Ministry of Energy (SENER) to support Mexico’s expanding energy demand and future economic development,” said François Poirier, TC Energy’s President and Chief Executive Officer.

To advance Mexico’s economic growth and energy security, the Government of Mexico has announced plans to add approximately 8.5 gigawatts of newly installed capacity from natural gas power plants. The Southeast Gateway pipeline, along with the Company’s other assets in Mexico, is positioned to play a vital role in supporting this initiative and the transition to lower-emission, more reliable energy sources.

About TC Energy
We’re a team of 6,500+ energy problem solvers connecting the world to the energy it needs. Our extensive network of natural gas infrastructure assets is one-of-a-kind. We seamlessly move, generate and store energy and deliver it to where it is needed most, to homes and businesses in North America and across the globe through LNG exports. Our natural gas assets are complemented by our strategic ownership and low-risk investments in power generation.

TC Energy’s common shares trade on the Toronto (TSX) and New York (NYSE) stock exchanges under the symbol TRP. To learn more, visit us at TCEnergy.com.

FORWARD-LOOKING INFORMATION
This release contains certain information that is forward-looking and is subject to important risks and uncertainties (such statements are usually accompanied by words such as "anticipate", "expect", "believe", "may", "will", "should", "estimate", "intend" or other similar words). Forward-looking statements in this document are intended to provide TC Energy security holders and potential investors with information regarding TC Energy and its subsidiaries, including management's assessment of TC Energy's and its subsidiaries' future plans and financial outlook. All forward-looking statements reflect TC Energy's beliefs and assumptions based on information available at the time the statements were made, and as such are not guarantees of future performance. As actual results could vary significantly from the forward-looking information, you should not put undue reliance on forward-looking information and should not use future-oriented information or financial outlooks for anything other than their intended purpose. We do not update our forward-looking information due to new information or future events, unless we are required to by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the anticipated results, refer to the most recent Quarterly Report to Shareholders and Annual Report filed under TC Energy’s profile on SEDAR+ at www.sedarplus.ca and with the U.S. Securities and Exchange Commission at www.sec.gov.

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Media Inquiries:
Media Relations
media@tcenergy.com
403-920-7859 or 800-608-7859

Investor & Analyst Inquiries:
Gavin Wylie / Hunter Mau
investor_relations@tcenergy.com
403-920-7911 or 800-361-6522

PDF available: http://ml.globenewswire.com/Resource/Download/71eecfb6-0f18-4356-a066-6de39df05b1f

FAQ

What is the cost and capacity of TC Energy's Southeast Gateway pipeline?

The Southeast Gateway pipeline was completed at US$3.9 billion (13% under budget) and has a capacity of 1.3 Bcf/d spanning 715 kilometers.

How does the Southeast Gateway pipeline benefit Mexico's energy infrastructure?

The pipeline supports Mexico's plan to add 8.5 gigawatts of new natural gas power plant capacity, enhancing energy security and economic development.

When did TC Energy begin collecting tolls on the Southeast Gateway pipeline?

TC Energy began collecting tolls in May 2025, with the first payment received from CFE on schedule.

What regulatory approvals are pending for TC Energy's Southeast Gateway pipeline?

TC Energy is awaiting approval from the Comisión Nacional de Energía (CNE) for regulated rates to provide service to potential future interruptible service users beyond CFE.

How long did it take TC Energy to complete the Southeast Gateway pipeline?

The pipeline was constructed in less than three years from the project's final investment decision.