TC Energy Corporation (TRP): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of TC Energy Corporation's structural position, and honestly, the stability of their contract model is the anchor in this volatile energy market. As we look at late 2025, the story isn't about a price war; it's about the near-impenetrable moat built by rate-regulated, long-term contracts securing 97% of comparable EBITDA, even as supplier leverage shows up in high capital expenditure projections like the $5.5 to $6.0 billion planned for 2025. We'll break down the five forces-from the intense rivalry with Enbridge to the very low threat of new entrants-to see exactly how this infrastructure giant is positioned to hit its projected $10.8 to $11.0 billion comparable EBITDA this year. It's a fascinating look at infrastructure defintely defensibility, so dive in below.

TC Energy Corporation (TRP) - Porter's Five Forces: Bargaining power of suppliers

When you look at TC Energy Corporation's (TRP) major infrastructure build-out, the power held by its suppliers-especially for specialized labor and materials-is a key risk factor you need to model. This force is elevated because the nature of pipeline construction demands very specific, often scarce, inputs and expertise.

The capital intensity for securing pipeline steel and specialized construction services is inherently high. Tariffs on imported steel, for instance, directly raise the capital expenses for new pipelines, particularly in regions with heavy LNG development like the Southeast. This reliance on large-scale material procurement puts immediate cost pressure on TC Energy Corporation.

We saw these supply-side pressures manifest clearly on the Coastal GasLink project. TC Energy Corporation faced noted headwinds related to labor and steel availability, which contributed to significant cost escalation. The final reported cost for the Coastal GasLink pipeline reached approximately $14.5 billion, a substantial increase from earlier estimates like $11.2 billion and the original projection of $6.6 billion. This kind of overrun is a classic signal of supplier leverage, often driven by contractor underperformance, disputes, and shortages of skilled labor in the Western Canadian market.

The market for the firms capable of executing these massive, complex projects is not fragmented; it's concentrated. While the overall U.S. Oil & Gas Pipeline Construction industry has 1,846 businesses as of 2025, the segment handling large-scale, specialized transmission lines is much tighter. Global leaders like Bechtel Corporation, Bonatti S.p.A., and Primoris Services Corporation are key players in this space. When only a few specialized contractors can handle the terrain and technical demands of a project like Coastal GasLink, their bargaining power naturally increases.

Here's a quick look at the financial scale that keeps suppliers engaged with TC Energy Corporation:

This ongoing capital deployment by TC Energy Corporation ensures that suppliers have a steady stream of high-value work. For example, TC Energy Corporation maintained its 2025 net capital expenditure guidance at $5.5 to $6.0 billion, and they expected to place approximately $8.5 billion of capital projects into service in 2025. This level of planned spending translates directly into significant revenue opportunities for the limited pool of capable suppliers, reinforcing their negotiating position.

Furthermore, the complexity of the supply chain itself introduces risks that suppliers can exploit. TC Energy Corporation, as a major operator in Canada, the U.S., and Mexico, is actively managing its supply chain for human rights compliance, specifically addressing risks of forced labor and child labor, as detailed in its February 2025 report covering 2024 activities. While this is a governance issue, it adds another layer of complexity and potential disruption that specialized suppliers must navigate, which can be used to justify higher pricing or stricter terms.

You should watch for these specific supplier-side indicators:

• Steel price volatility and tariff impacts.
• Availability and cost of specialized pipeline welders.
• Contractor performance metrics on current projects.
• TC Energy Corporation's success in cost recoveries from past disputes.

TC Energy Corporation (TRP) - Porter's Five Forces: Bargaining power of customers

The bargaining power of customers for TC Energy Corporation is defintely extremely low, primarily because the business model is heavily reliant on rate-regulated assets and long-term, firm transportation agreements. This structure essentially locks in revenue streams, significantly limiting a customer's ability to negotiate terms downwards.

The stability is quantifiable. As of the latest updates in 2025, approximately 97% of TC Energy Corporation's comparable Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) outlook is underpinned by either rate-regulation or long-term take-or-pay contracts. For fiscal year 2025, the comparable EBITDA is guided to be in the range of C$10.7 billion to C$10.9 billion.

Here's a quick look at the secured revenue base based on the 2025 guidance:

When new capacity is contracted, customers face high switching costs because these agreements are structured for the very long term. For instance, recent growth projects sanctioned by TC Energy Corporation are expected to be backed by contracts with terms of up to 20 years, often structured as take-or-pay or cost-of-service agreements. This long commitment horizon means customers are essentially committed to paying for the capacity regardless of short-term market fluctuations.

Key customers are large, sophisticated entities that often have limited viable alternatives for transporting the required volumes of natural gas across the continent. The company's unique continental footprint across Canada, the U.S., and Mexico provides critical connectivity that substitutes cannot easily replicate.

We can see the scale of service to major customer categories through recent operational data:

• Deliveries to Liquefied Natural Gas (LNG) facilities averaged 3.5 Bcf/d in the second quarter of 2025.
• Mexico Natural Gas Pipelines flows averaged 3.3 Bcf/d in the third quarter of 2025.
• Canadian Natural Gas Pipelines deliveries averaged 23.4 Bcf/d in the second quarter of 2025.

Furthermore, growing demand from new gas-fired power generation, especially for powering AI data centers, increases customer reliance on TC Energy Corporation's infrastructure. The need for reliable, base load power to complement intermittent renewables is driving this growth. TC Energy Corporation is actively engaging this segment:

• The company sees data center opportunities exceeding two bcfd in North America.
• TC Energy Corporation is in discussions with more than 30 potential customers across the data center value chain.
• Approximately two-thirds of the roughly 660 data centers under development or construction in the US are located within 50 miles of TC Energy Corporation's existing pipelines.

TC Energy Corporation (TRP) - Porter's Five Forces: Competitive rivalry

The competitive rivalry facing TC Energy Corporation is intense, reflecting the capital-intensive and essential nature of North American energy midstream infrastructure. You are competing directly against established, large-scale operators for future capacity commitments and strategic project positioning.

High rivalry exists with major North American players like Enbridge, Kinder Morgan, and Williams Companies. This competition is not about slashing rates on your existing, largely contracted assets; instead, the battle is for securing the long-term contracts that underpin future growth projects. The market is shifting its focus from traditional producer-driven supply-push dynamics to demand-pull from power generation and data centers.

New pipeline capacity additions, especially out of the Permian Basin, intensify the rivalry for market share. The Permian Basin is expected to see over 9 Bcf/d of new takeaway capacity additions by 2030, forcing operators to secure new, long-term contracts as older ones expire, particularly on pipelines like the Gulf Coast Express (GCX) where all firm transport contracts roll off by 2029.

TC Energy is strategically focusing on brownfield expansions to leverage its existing 93,600 kilometers of natural gas pipelines. This approach aims to bypass the permitting hurdles that have plagued greenfield projects, with CEO Francois Poirier stating the company does not see a need for a big greenfield pipeline until at least the mid-2030s. The company is executing on this by advancing projects like the $900 million Northwoods expansion on the ANR system, which adds 0.4 Bcf/d capacity and is backed by a 20-year, take-or-pay contract.

This focus on low-risk, in-corridor growth, supported by secured contracts, helps maintain a strong market position, as evidenced by the financial outlook.

The company is projecting a high comparable EBITDA of $10.8 to $11.0 billion for 2025, which shows strong market position, especially since this is an upward revision from the initial guidance of $10.7 to $10.9 billion. Furthermore, 97% of TC Energy's EBITDA is secured via rate-regulated or long-term contracts, providing a significant buffer against immediate price competition on existing flows.

Here is a snapshot of the competitive activity among key North American midstream operators as of late 2025:

The nature of the competition is heavily weighted toward project execution and contract certainty, which you can see reflected in the strategic moves:

• Focus on in-corridor expansions like the Northwoods project.
• Advancing $8.5 billion of capital projects expected to be in service in 2025.
• CEO Poirier noted requests for incremental capacity on projects already announced.
• Competition for securing anchor shippers for new capacity serving LNG and data centers.
• Williams reviving projects previously halted due to permitting issues.

TC Energy Corporation (TRP) - Porter's Five Forces: Threat of substitutes

When you look at the substitutes for TC Energy Corporation's core business-moving and supplying natural gas-the picture is complex. It's not a simple case of one technology replacing another overnight; it's more about a gradual shift where gas plays a necessary bridging role. Honestly, the long-term threat from renewables is definitely present, but the near-term reality is that the grid still needs the reliability gas provides.

The long-term threat from renewable energy and battery storage is moderate, but it's accelerating. For instance, in California through the first eight months of 2025, utility-scale solar generation hit 40.3 billion kilowatt hours, closing the gap on natural gas generation, which stood at 45.5 BkWh for the same period. Nationally, the US is scheduled to bring online 43 GW of new solar capacity in 2025 alone. However, battery storage, while growing, still faces limitations; in California's peak evening hours (5:00 p.m. to 9:00 p.m. in 2025), battery generation reached 4.9 GW, displacing some gas, but this is still a fraction of total peak needs.

Natural gas remains positioned as a critical transitional fuel, especially for power generation. This is evident as the US expects 20 new natural gas power plants totaling 7.7 GW of capacity to come online by 2025. This buildout supports coal-to-gas conversions and meets rising demand from sectors like data centers. The need for this dispatchable power is clear because non-renewables, including natural gas, still provide up to 60-70% of stable baseload power, which is essential when intermittent sources like wind and solar drop off.

Electricity transmission lines are a substitute for gas-fired power generation capacity, but the gas infrastructure is needed for grid reliability. While renewables grow, the grid needs fast-starting capacity to manage fluctuations. For example, in the WECC-Basin area, under extreme winter conditions causing thermal plant outages, the region could face a shortfall of 1.6 GW before imports can even help. This underscores why gas-fired generation, which is flexible and controllable, is still in demand to support peak loads when solar is unavailable, such as before sunrise or after sunset.

TC Energy is actively diversifying its energy portfolio, which is a direct strategic response to the substitute threat. You see this in their nuclear investments. TC Energy sanctioned the Bruce Power Unit 5 Major Component Replacement (MCR) at a cost of $1.1 billion. This move extends the life of the nuclear unit until 2064. To give you a sense of the operational strength of this substitute/complementary asset, the overall Bruce Power network achieved a 98% availability rate in the second quarter of 2025.

When we look specifically at the long-haul transport of natural gas, no viable, large-scale substitute exists right now. TC Energy's medium-term capital program is projected to be $6 billion to $7 billion per year, largely focused on natural gas transmission to connect supply basins to demand centers like the Gulf Coast for LNG exports. While the US Department of Transportation has a proposal for moving LNG by rail, which could serve niche areas, the existing infrastructure is massive. The US direct-to-consumer natural gas system alone comprises 2.8 million miles of pipelines, which can also carry Renewable Natural Gas (RNG).

Here's a quick comparison of the forces at play in the power generation segment:

The key takeaways regarding substitutes for TC Energy's operations are centered on the grid's need for dispatchable power and the lack of pipeline alternatives:

• Renewable energy growth is aggressive, with 43 GW of solar capacity slated for US addition in 2025.
• Natural gas generation in California declined 17% year-over-year in 2025.
• The total Bruce Power refurbishment program is valued at CAD13bn ($9.1bn).
• Gas-fired generation is needed to balance supply variability from wind and solar.
• TC Energy's 2025 Comparable EBITDA guidance is $10.7-$10.9 billion.

TC Energy Corporation (TRP) - Porter's Five Forces: Threat of new entrants

You're assessing the barriers to entry for new players looking to compete directly with TC Energy Corporation in the North American energy infrastructure space as of late 2025. Honestly, the threat of new entrants is very low. This isn't just about having deep pockets; it's about navigating a landscape where the capital required is astronomical, and the regulatory gauntlet is designed for incumbents.

Consider the sheer scale of what TC Energy Corporation is already deploying. The company is on track to place \$8.5 billion of assets into service in 2025 alone. That level of continuous, massive capital deployment creates an immediate scale advantage that a startup simply cannot match without years of secured financing and project execution history.

The hurdles aren't just financial; they are political and legal. New greenfield projects face substantial legal and environmental opposition, which reliably creates years of delays. Look at the history: TC Energy Corporation's canceled Energy East pipeline, which had a projected cost of C\$15.7 billion (or about US\$11 billion), was stopped amid regulatory challenges and opposition from environmental groups. Similarly, the canceled Northern Gateway project, estimated at C\$7.9 billion (US\$5.5 billion), was halted due to strong opposition from Indigenous and local communities. Even a project with government backing, like the Cedar LNG project, still required 3-1/2 years to complete the Impact Assessment Act process.

We can map out some of these capital barriers to show you the magnitude of the investment required to even attempt to compete in the broader market:

Now, the regulatory environment is shifting, albeit slowly. The US Federal Energy Regulatory Commission (FERC) has taken steps to streamline the process. Specifically, FERC eliminated the 150-day waiting period that previously blocked construction after federal authorization. This change is projected to cut 6-12 months off the construction timeline for new natural gas infrastructure projects. Still, permitting remains complex, as evidenced by the multi-year timelines for major projects in Canada and the need for new project announcements to align with the latter half of 2025 and into 2026 for TC Energy Corporation.

TC Energy Corporation's established network and scale act as a massive moat. For instance, one in every 10 molecules of natural gas moved across North America touches the Nova Gas Transmission Limited (NGTL) system, which is part of TC Energy Corporation's network. This established footprint means new entrants don't just need a pipeline; they need to connect to a system that already serves critical demand centers, which is incredibly difficult to replicate.

Finally, securing the revenue foundation is a major barrier for unproven new entrants. TC Energy Corporation has 97% of its comparable EBITDA outlook secured via rate-regulated or long-term contracts. New projects sanctioned by TC Energy Corporation over the past 12 months are backed by 20-year take-or-pay or cost-of-service contracts. An unproven entity trying to secure a 20-year, take-or-pay contract with a creditworthy counterparty, like the one backing the \$900 million Northwoods project, faces an uphill battle when competing against an established player with a proven track record of execution and reliability.

• New projects often target build multiples in the 5-7 times range for TC Energy Corporation.
• TC Energy Corporation has raised its dividend in each of the past 25 years.
• The company's 2025 Comparable EBITDA outlook is between \$10.8 to \$11.0 billion.