Hot Picks: Power and pipeline stocks positioned for long-term growth

Canadian energy infrastructure companies are seeing renewed investor interest as LNG expansion, rising electricity demand and export growth support a new investment cycle for the sector.

BNN Bloomberg spoke with Nate Heywood, managing director of institutional equity research at ATB Cormark Capital Markets, about why midstream and power infrastructure companies are positioned to benefit from long-term production growth, data centre expansion and rising global demand for Canadian energy exports.

Key Takeaways

• Rising LNG development and stronger support for export projects are helping drive a new investment cycle in Canada’s energy infrastructure sector.
• Midstream companies are benefiting from growing production volumes and increased demand for transportation, storage and processing infrastructure.
• Propane export opportunities have strengthened as Asian markets seek more stable and reliable energy suppliers.
• Data centre expansion and electrification trends are increasing long-term demand for natural gas-fired power generation.
• Investors continue to favour infrastructure companies with visible growth projects, disciplined spending and stable cash flow generation.

Read the full transcript below:

LINDSAY: Okay, it’s time now for Hot Picks. Today, we are looking at three Canadian plays in the energy sector. So, for more perspective, let’s bring in Nate Heywood, managing director of institutional equity research at ATB Cormark Capital Markets. It’s great to have you join us.

NATE: Thanks very much, Lindsay. Appreciate you having me on.

LINDSAY: Yeah, the energy sector is obviously a very interesting topic of conversation, particularly in Canada over the last few months. Just before we dive into your specific picks, I want to take a broader look at what the sector looks like right now. Is Canada entering a new kind of energy investment cycle, or is this still just a short-term commodity rally?

NATE: Yeah, you know what, Lindsay? I would absolutely say we are entering a new cycle of investment. I think there are three main fundamental factors here that are really setting up for the midstream space.

The first one is higher commodity prices. I think if there’s one takeaway from all the Q1 earnings releases, everybody expects there to be a higher floor on commodity prices into the long term, so I think that should be supportive.

The second is more supportive sentiment toward large export projects, whether LNG or crude projects are pursued. We’re seeing a number of projects being proposed and moving forward, with some potentially making FID, notably the Enbridge Mainline optimization, too, by this summer.

Then the third is confidence in the upstream space. Canada is obviously blessed with a lot of oil reserves, but we also have low decline rates, and we’ve seen some consolidation among upstream players that should support volume growth within the basin. I think that supports the midstream space, especially incumbents operating assets currently and looking to do optimization and brownfield-type opportunities.

LINDSAY: Okay, so with that, let’s get into your Hot Picks. Your first one is AltaGas. What is it that you like about this one?

NATE: Yeah, so AltaGas is a very uniquely positioned midstream company. It also has some utility assets, but I think the most exciting part right now is on the midstream side and its propane export business.

They ship propane to Asian markets. We’ve seen those markets disrupted by the Strait of Hormuz. About 1.3 million barrels of propane that usually reach Asian markets have been cut off, and so AltaGas has stepped in, and Canada has become a more secure, reliable player in international propane exports and in providing the energy those countries need.

I think we’ve seen it firsthand with pricing. The spread between the Asian price and the local domestic benchmark has more than doubled since the pre-conflict period, and I think that’s supportive of future contracts and development.

AltaGas is pursuing growth projects with its export business, looking to essentially double its export capacity, whether through the initial phases of the Ridley Energy Export Facility or subsequent optimization phases. I think that’s really where AltaGas stands out — its export position and its ability to provide Canadian producers with access to global markets.

LINDSAY: Your next pick has been in the headlines for the last couple of days, Pembina Pipeline, because of the Heartland Expansion Project. So obviously you’re seeing opportunity there. What do you like about it?

NATE: That’s right. Yeah, Pembina is probably the most diversified midstream player that we cover. It has exposure to natural gas, natural gas liquids and crude oil, and it offers services including gas processing, fractionation, transportation and storage.

What we’ve seen recently is Pembina coming out with long-term guidance of five to seven per cent EBITDA fee-based growth through 2030, and that provides a lot of confidence in terms of how management expects to grow the business.

That guidance is really supported by the volume growth they’re seeing in the basin, probably around three to four per cent annually, their ability to provide customers with increased market access and opportunities within Alberta.

As you mentioned, the Heartland Expansion Project, the straddle plant they’re developing, directly supports Alberta’s petrochemical industry, but it’s also looking at data centre development, with a greenfield project potentially making FID in the coming months.

I think this provides a long runway for growth, and with a diversified asset base, we really view Pembina as the incumbent that will continue to have an advantage going forward through attractive brownfield projects.

LINDSAY: Yeah, and you talked about some of these big projects off the top and how important this is for the sector to continue to grow. I wonder, just before we move on to your last pick, there’s obviously a time crunch here to get these projects moving to capitalize on what’s happening right now in terms of energy demand.

NATE: Yeah, I would absolutely agree. I think right now the industry is looking to move quickly on these newer projects, and hopefully, with shorter review times, they should be able to move forward faster than they have in the past.

LINDSAY: Okay. Lastly, Capital Power Corporation, your final pick. Tell us about it.

NATE: Yeah, this one offers a little bit different exposure — more direct power exposure. Capital Power is one of five North American independent power producers with more than 10 gigawatts of natural gas power generation.

With that, it’s a really strong play on data centres, both in Alberta and across North America. They’ve recently acquired assets in PJM, which is a very attractive data centre market, and they’ve also partnered with Apollo to pursue M&A transactions and continue growing their asset base.

So when we look at Capital Power, it’s really a low-beta play on data centres and the buildout of AI infrastructure. They’re the incumbent. They’re the company that’s going to be able to grow through smaller brownfield projects because they already have the infrastructure in place, and they’re able to expand alongside growing power demand.

And that’s not just from data centres. There are also coal retirements, electrification and several other factors driving power demand growth.

LINDSAY: Okay, lastly, are there any headwinds for these companies? There’s obviously a lot of opportunity here, but is there anything you’re watching that could become a major headwind?

NATE: You know, I think volatility in commodity prices has been somewhat of a limitation. I think many investors are concerned that with this route potentially reopening, and with crude prices trading down today, commodity prices might follow.

But going back to my earlier statements, I do think the floor is higher. I think the setup is much stronger for midstream companies and energy infrastructure players to continue serving a vital role in the sector.

LINDSAY: Okay, we’ll leave it there. Nate Heywood, managing director of institutional equity research at ATB Cormark Capital Markets. Appreciate your time. Thanks for joining us.

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This BNN Bloomberg summary and transcript of the May 27, 2026 interview with Nate Heywood are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.