TransCanada approves 1.1 million b/d Energy East crude pipeline

TransCanada Corp is moving forward with its 1.1 million b/d Energy East Pipeline project based on binding, long-term contracts received from producers and refiners. A recent open season on the pipeline concluded with the company having signed 900,000 b/d of firm, long-term contracts to transport crude oil from Western Canada to Eastern Canadian refineries and export terminals (OGJ Online, Apr. 2, 2013). Eastern Canada currently imports 700,000 b/d of crude oil, according to TransCanada.

TransCanada expects the Energy East Pipeline to enter service by late-2017 for deliveries in Quebec and 2018 for deliveries to New Brunswick. The project involves converting about 3,000 km of gas pipeline on TransCanada’s existing Canadian Mainline to crude service and building 1,400 km of new pipeline. Energy East will transport oil from receipt points in Alberta and Saskatchewan to delivery points in Montreal, the Quebec City region and Saint John, NB, enhancing Western Canadian producer access to Eastern Canadian and international markets.

The pipeline will terminate at Canaport in Saint John, where TransCanada and Irving Oil have formed a joint venture to build, own, and operate a new deep water marine terminal.

TransCanada intends early next year to proceed with the necessary regulatory applications for the pipeline project and terminal. The company expects Energy East to cost about $12 billion, excluding the transfer value of Canadian Mainline natural gas assets.

The decision to move forward on Energy East has not diminished the need for Keystone XL, according to TransCanada Pres. and Chief Executive Officer Russ Girling. “Energy East is one solution for transporting crude oil but the industry also requires additional pipelines such as Keystone XL to transport growing supplies of Canadian and US crude oil to existing North American markets,” he said, adding, “Both pipelines are required to meet the need for safe and reliable pipeline infrastructure and are underpinned with binding, long-term agreements.”

Contact Christopher E. Smith at chriss@ogjonline.com.

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