Application for Energy East Pipeline delayed

TransCanada has delayed its goal of filing an application for its proposed Energy East Pipeline with the National Energy Board until next year, the company’s vice-president of eastern business development said Thursday.

SAINT JOHN, N.B. — TransCanada has delayed its goal of filing an application for its proposed Energy East Pipeline with the National Energy Board until next year, the company’s vice-president of eastern business development said Thursday.

Steve Pohlod told an energy conference in Saint John, N.B., that there is too much work to do to be able to meet its initial goal of filing the application for the $12-billion project before the end of this year.

“There is still work we have to do out in the field and environmental work that we still have to undertake,” he said. “There is work that is required as a result of the changes in scope and the changes in route that we are still contemplating.”

The 4,500-kilometre Energy East Pipeline would ship up to 1.1 million barrels per day of oil from Alberta to refineries and export terminals in Quebec and New Brunswick.

The proposal involves converting a portion of TransCanada’s underused natural gas mainline to oil service and building 1,400 kilometres of new pipeline to Saint John.

The pipeline is one of two projects that have been proposed to move oil out of Western Canada.

Enbridge (TSX:ENB) plans to spend $110 million to reverse its Line 9B to carry western crude to meet Quebec’s refining needs. The National Energy Board will conduct hearings on the proposal in October, with a decision expected in 2014.

Both pipelines are needed to move oil from the West to the East. Alberta and New Brunswick are staunch supporters of Energy East but it’s not known whether other provinces — most notably Quebec — are behind it. Prime Minister Stephen Harper has expressed federal support for the development, which would help landlocked Alberta get its oil to more lucrative markets.

TransCanada recently commissioned a study to back its project. The Deloitte & Touche LLP report predicts the equivalent of about 10,000 full-time jobs across the country will be needed to develop and build the Energy East Pipeline until 2018, with Quebec and Ontario coming out the big economic winners in the project.

The politics of pipelines is a tangled web. Harper is pushing U.S. President Barack Obama to approve TransCanada’s Keystone XL pipeline, which would carry Canadian oilsands bitumen to refineries on the American Gulf Coast. The project has galvanized environmental groups south of the border who are against it.

Large claims have also been made about the impact of building pipelines across Canada, with TransCanada CEO Russ Girling heralding Energy East as critical infrastructure that makes the country stronger, similar to building the Canadian Pacific Railway or the Trans-Canada Highway.

But the project has its critics in New Brunswick as TransCanada heard a variety of concerns with the route it plans to take as it holds open house public meetings across the country.

Cyrille Simard, the mayor of Edmundston, N.B., has called on the company to guarantee that the pipeline would not harm the area’s watershed. TransCanada has revised the proposed route but Simard has asked for further revisions.

Pohlod said TransCanada (TSX:TRP) won’t be able to address everyone’s concerns with the route.

“You do have to listen to the concerns of the people and you have to seriously consider them and look at whether you can address and can accommodate them.”

The president of Irving Oil also told the conference Thursday that plans for a proposed new marine terminal for oil exports would have to be expanded because of the pipeline’s increased capacity.

Irving announced in August that it planned to partner with TransCanada to build a $300-million marine terminal at its Canaport facility near its refinery in Saint John to export crude from the pipeline to foreign markets. But Paul Browning said that was based on an original estimate of the pipeline carrying about 850,000 barrels per day, which has since been increased to 1.1 million barrels.

“There’s enough crude coming our way now that we’ve decided we need to expand it to be a two-berth jetty and we can take two large tankers simultaneously,” Browning said. “So that investment estimate will be revised upward as we do the engineering.”

He said the terminal project will require National Energy Board approval but it will be included as part of the overall pipeline application.

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