Energy East pipeline will cost $12 billion to build and reach East Coast by 2018
TransCanada CEO Russ Girling. Photo: Courtesy of MSNBC.
TransCanada Corp. announced Thursday that it plans to build the 1.1 million barrel a day Energy East pipeline from Alberta to New Brunswick and it could be in service by 2018.
The Energy East pipeline is expected to cost approximately $12 billion, excluding the transfer value of Canadian Mainline natural gas assets.
TransCanada recently held an open season to give crude oil producers the opportunity to express interest in shipping their product on Energy East. According to TransCanada CEO Russ Girling, support for the project was quite strong.
“We are very pleased with the outcome of the open season for the Energy East Pipeline held earlier this year and are excited to move forward with a major project that will bring many benefits across Canada,” said Girling. “This is an historic opportunity to connect the oil resources of western Canada to the consumers of eastern Canada, creating jobs, tax revenue and energy security for all Canadians for decades to come.”
Eastern Canada currently imports approximately 700,000 bbl/day, mostly from Algeria, Saudi Arabia, Nigeria, Angola, Iraq, Venezuela, Texas and North Sea countries, including Norway and the United Kingdom. Girling says foreign oil is more expense than Western Canadian oil, which is why Eastern Canadian refinery customers strongly support Energy East.
“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 U.S. crude oil to existing North American markets,” said Girling.
“Both pipelines are required to meet the need for safe and reliable pipeline infrastructure and are underpinned with binding, long-term agreements.”
The Energy East pipeline project involves converting a portion of natural gas pipeline capacity in approximately 3,000 kilometres (1,864 miles) of TransCanada’s existing Canadian Mainline to crude oil service and constructing approximately 1,400 kilometres (870 miles) of new pipeline.
The Energy East pipeline will transport crude oil from receipt points in Alberta and Saskatchewan to delivery points in Montreal, the Quebec City region. That portion of the project is slated to be ready by 2017, according to TransCanada.
Mike Hudema, Greenpeace Canada.
The Energy East pipeline will terminate at Canaport in Saint John, New Brunswick where TransCanada and Irving Oil have formed a joint venture to build, own and operate a new deep water marine terminal.
Girling says that while the Energy East pipeline will use a portion of Canadian Mainline capacity, TransCanada is committed to continuing to meet the needs of its gas customers in eastern Canada and the N.E. United States.
Pipeline projects like Enbridge’s Northern Gateway from Alberta to the West Coast have run into fierce opposition. Anticipating the need to build social licence for Eastern Energy, TransCanada says it is already engaged in discussions with Aboriginal communities and key stakeholder groups as part of its initial design and planning work for the project, and that will continue.
“TransCanada is a leading North American energy infrastructure company with one of the best safety records in the industry and that is something we are very proud of,” said Girling. “Energy East will be designed and operated with a singular focus on safety – that is what Canadians expect and that is what TransCanada will deliver. We all recognize that oil is essential in our daily lives. We need it to heat our homes, operate our vehicles and make thousands of products we rely on every day. What we must do is ensure the oil is transported safely and reliably.”
Greenpeace, an opponent of the Canadian oil sands and building more pipelines, was quick to condemn the Energy East pipeline announcement.
“Nations shouldn’t be built around a project that destroys the environment, poisons water, violates Treaty rights and further accelerates a global climate crisis that is already resulting in weather disasters around the world,” said Mike Hudema, Edmonton-based oil sands campaigner.
“Hopefully the same people-based movements that have stalled other ill conceived tar sands pipeline projects will also rise up and give our governments the wake-up call it needs.”
TransCanada says it intends to proceed with the necessary regulatory applications for approvals to construct and operate the Energy East pipeline project and terminal facilities in early 2014.
David Manning (left), Alberta’s representative in Washington, and Premier Alison Redford on Capitol Hill in Washington, DC. April 10. Photo: Premier Alison Redford Facebook.
The Alberta government was quick to support Energy East pipeline, both politically and by committing some of the crude oil it receives for in kind payment of royalties.
“This is truly a nation-building project that will diversify our economy and create new jobs here in Alberta and across the country,” said Alberta Premier Alison Redford in a statement.
Redford, who has been pushing development of a national energy strategy since becoming premier in 2011, says that a “consensus” on a Canadian Energy Strategy at last week’s Council of the Federation meeting between the premiers will help to move forward projects like Energy East.
“That’s why I’ve been pushing the strategy — to spur cooperation between the provinces in getting Canada’s energy onto international markets, to get fairer prices and in turn be able to provide the high quality of living Albertans, and Canadians, deserve,” she said.
“I’m proud of what we have achieved so far and I will continue working with other Premiers to build new energy export markets. All Canadians benefit from a strong energy economy, and we are stronger working together.”
Calgary-based TransCanada operates a network of natural gas pipelines that extends more than 68,500 kilometres, tapping into virtually all major gas supply basins in North America.
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