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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--TransCanada Corporation (NYSE:TRP) (Calgary, Alberta, Canada) is moving forward with its plan to build a $12 billion west-to-east crude-oil pipeline across Canada, buoyed by firm commitments from shippers for nearly all of the pipeline's 1.1 million-barrel-per-day (BBL/d) capacity. The market response to the Energy East Pipeline was so strong that TransCanada has decided to partner with Imperial Oil Limited (Saint John, New Brunswick) on a $300 million deep-water port expansion in Saint John, New Brunswick.
"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," Russ Girling, TransCanada's president and chief executive officer, said August 1 in announcing the decision. "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."
The TransCanada leader said shippers' interest in Energy East partly stems from eastern Canadian refiners looking for a stable and reliable supply of western Canadian crude oil. Western refineries currently import about 700,000 BBL/d of crude oil. The new pipeline also could support crude-oil exports from eastern Canada.
Western Canadian Select (WCS) crude oil is sharply discounted from benchmark crudes like West Texas Intermediate (WTI) and Brent, because WCS is heavier and has more sulfur. Also, Western Canada's crude is located in oil sands formations in remote areas. Extracting, processing and transporting the heavy crude to markets adds significant costs. The heavy Canadian crude has been discounted by $20 to $40 per barrel over the last 12 months. The current price disparity between WCS and WTI is about $25 per barrel.
The $12 billion price tag does not reflect the internal transfer value of TransCanada's existing Canadian Mainline natural gas pipeline assets, the company said. The Energy East project will convert about 1,864 miles of existing Canadian Mainline natural gas pipeline capacity to carry crude oil, and add about 870 miles of new pipeline capacity in Alberta, Saskatchewan, Manitoba, eastern Ontario, Québec and New Brunswick to link up with the converted gas pipeline. Energy East will transport crude oil from receipt points in Alberta and Saskatchewan to delivery points in Montréal, the Québec City region and Saint John. TransCanada expects to seek regulatory approval from the National Energy Board (NEB) (Ottawa) early next year, and to kick-off operations in late 2017. The crude initially will be delivered to Québec, but as of 2018 the crude can be delivered to New Brunswick.
TransCanada said the project will involve the construction of new tank terminals in Hardisty, Alberta; Saskatchewan; Québec City; and Saint John. The Québec City and Saint John terminals will include facilities for marine tanker loading. The project also will deliver oil to existing Québec refineries in Montréal, near Québec City, and Saint John.
Shippers have made legally binding commitments for about 900,000 BBL/d of the project's 1.1 million-BBL/d capacity, Girling said in his August 1 announcement. For more on the pipeline project, see May 7, 2013, article - TransCanada Holds 'Open Season' for Proposed Crude Oil Pipeline Conversion.
The same day TransCanada announced it was moving ahead with Energy East, it also announced a joint venture with Irving Oil to invest $300 million to develop and construct the new Canaport Energy East Marine Terminal at Irving Canaport in Saint John. Irving Oil has a 300,000-BBL/d refinery in Saint John, for which it imports more than 100 million barrels of crude oil each year at the existing Irving Canaport port. By enlarging the port to accommodate the world's largest crude-oil carriers, Irving Oil will have increased flexibility to either export or import more crude oil. In addition, Repsol Petroleo S.A. already operates a liquefied natural gas (LNG) terminal at the existing port complex.
"We are extremely pleased to be partnering with TransCanada. They are a world-class company and lead their industry in safety and environmental stewardship," said Paul Browning, Irving Oil's president and chief executive, in an August 1 statement. "The Canaport Energy East Marine Terminal will connect TransCanada's Energy East Pipeline to an ice-free, deep water port. It will allow Canadian producers direct access to world markets for exporting Canadian oil via the world's largest crude-carrying vessels."
Engineering and design work for the proposed marine terminal is expected to begin in 2015. Irving Oil plans to have the new port's in-service date coincide with the Energy East pipeline project. The new Canaport Energy East Marine Terminal will be located adjacent to Irving Oil's existing import terminal and will be operated by Irving Oil.
The Energy East project has been strongly supported by Canada's federal government and the premiers of New Brunswick and Alberta, but the project is drawing criticism from environmental, civic and First Nations organizations.
A national campaign to stop the pipeline is being managed by The Council of Canadians (Ottawa, Ontario), a social justice organization. Andrea Harden-Donahue, the group's energy specialist, said the group will attend open houses organized by TransCanada and regulatory hearings to be held by the National Energy Board. "While using an existing pipeline may reduce TransCanada's costs, it increases spill risks for the many rivers, lakes and communities along the route," she said in a statement.
The project also is opposed by some environmental groups. Sierra Club Canada said the west-east pipeline is "not in the best interest of Maritimers." In a statement, Gretchen Fitzgerald, director of the environmental group's Atlantic chapter, added: "Over the past year we have heard countless stories of pipelines leaking around North America. It is not a question of whether the Energy East pipeline would leak, but when and where."
Some of Canada's First Nations communities also are wary of the proposed pipeline and deep-water port. According to the Canadian Broadcasting Corporation (CBC), the Assembly of First Nation Chiefs in New Brunswick opposes both projects because it has "serious concerns over negative environmental impacts" they could have on the aboriginal fishery in the Bay of Fundy.
The New Brunswick group said it also is worried about the projects' possible impact on its ability to exercise constitutionally protected aboriginal and treaty rights to generate a livelihood from fishing. "But this isn't just a First Nations issue, nor is it limited to just the salmon," Chief George Ginnish, the assembly's Mi'kmaq co-chair, told the CBC. "There are a lot of people in non-aboriginal fishing villages along the Fundy coast who could suffer if the protection of the environment is not at the forefront of this Canaport expansion."
TransCanada, sensing the potential concerns of various stakeholders, has been meeting privately with First Nations leaders and publicly with other potentially affected stakeholders for months, spokesman Philippe Cannon told Industrial Info in an interview. "The Energy East pipeline crosses over 150 First Nations communities, and we started engaging with them months ago," he said. "We have had an absolutely positive response" from the dozens of meetings TransCanada has had with First Nations leaders. "Everything is going well. We have positive relations with First Nations communities across the country, and those communities generally support the Energy East project."
TransCanada has scheduled about 60 "open house" meetings across six Canadian provinces to provide information on the pipeline to the public. About 30 of those open house meetings have been held so far, and the balance are scheduled to take place later this month and in October.
"The other day we had 260 people come to our open house meeting in Edmundston, New Brunswick, and over 200 people went to our meeting in Saint John, New Brunswick," Cannon continued. "We are pretty happy with how things are going."
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Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
"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," Russ Girling, TransCanada's president and chief executive officer, said August 1 in announcing the decision. "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."
The TransCanada leader said shippers' interest in Energy East partly stems from eastern Canadian refiners looking for a stable and reliable supply of western Canadian crude oil. Western refineries currently import about 700,000 BBL/d of crude oil. The new pipeline also could support crude-oil exports from eastern Canada.
Western Canadian Select (WCS) crude oil is sharply discounted from benchmark crudes like West Texas Intermediate (WTI) and Brent, because WCS is heavier and has more sulfur. Also, Western Canada's crude is located in oil sands formations in remote areas. Extracting, processing and transporting the heavy crude to markets adds significant costs. The heavy Canadian crude has been discounted by $20 to $40 per barrel over the last 12 months. The current price disparity between WCS and WTI is about $25 per barrel.
The $12 billion price tag does not reflect the internal transfer value of TransCanada's existing Canadian Mainline natural gas pipeline assets, the company said. The Energy East project will convert about 1,864 miles of existing Canadian Mainline natural gas pipeline capacity to carry crude oil, and add about 870 miles of new pipeline capacity in Alberta, Saskatchewan, Manitoba, eastern Ontario, Québec and New Brunswick to link up with the converted gas pipeline. Energy East will transport crude oil from receipt points in Alberta and Saskatchewan to delivery points in Montréal, the Québec City region and Saint John. TransCanada expects to seek regulatory approval from the National Energy Board (NEB) (Ottawa) early next year, and to kick-off operations in late 2017. The crude initially will be delivered to Québec, but as of 2018 the crude can be delivered to New Brunswick.
TransCanada said the project will involve the construction of new tank terminals in Hardisty, Alberta; Saskatchewan; Québec City; and Saint John. The Québec City and Saint John terminals will include facilities for marine tanker loading. The project also will deliver oil to existing Québec refineries in Montréal, near Québec City, and Saint John.
Shippers have made legally binding commitments for about 900,000 BBL/d of the project's 1.1 million-BBL/d capacity, Girling said in his August 1 announcement. For more on the pipeline project, see May 7, 2013, article - TransCanada Holds 'Open Season' for Proposed Crude Oil Pipeline Conversion.
The same day TransCanada announced it was moving ahead with Energy East, it also announced a joint venture with Irving Oil to invest $300 million to develop and construct the new Canaport Energy East Marine Terminal at Irving Canaport in Saint John. Irving Oil has a 300,000-BBL/d refinery in Saint John, for which it imports more than 100 million barrels of crude oil each year at the existing Irving Canaport port. By enlarging the port to accommodate the world's largest crude-oil carriers, Irving Oil will have increased flexibility to either export or import more crude oil. In addition, Repsol Petroleo S.A. already operates a liquefied natural gas (LNG) terminal at the existing port complex.
"We are extremely pleased to be partnering with TransCanada. They are a world-class company and lead their industry in safety and environmental stewardship," said Paul Browning, Irving Oil's president and chief executive, in an August 1 statement. "The Canaport Energy East Marine Terminal will connect TransCanada's Energy East Pipeline to an ice-free, deep water port. It will allow Canadian producers direct access to world markets for exporting Canadian oil via the world's largest crude-carrying vessels."
Engineering and design work for the proposed marine terminal is expected to begin in 2015. Irving Oil plans to have the new port's in-service date coincide with the Energy East pipeline project. The new Canaport Energy East Marine Terminal will be located adjacent to Irving Oil's existing import terminal and will be operated by Irving Oil.
The Energy East project has been strongly supported by Canada's federal government and the premiers of New Brunswick and Alberta, but the project is drawing criticism from environmental, civic and First Nations organizations.
A national campaign to stop the pipeline is being managed by The Council of Canadians (Ottawa, Ontario), a social justice organization. Andrea Harden-Donahue, the group's energy specialist, said the group will attend open houses organized by TransCanada and regulatory hearings to be held by the National Energy Board. "While using an existing pipeline may reduce TransCanada's costs, it increases spill risks for the many rivers, lakes and communities along the route," she said in a statement.
The project also is opposed by some environmental groups. Sierra Club Canada said the west-east pipeline is "not in the best interest of Maritimers." In a statement, Gretchen Fitzgerald, director of the environmental group's Atlantic chapter, added: "Over the past year we have heard countless stories of pipelines leaking around North America. It is not a question of whether the Energy East pipeline would leak, but when and where."
Some of Canada's First Nations communities also are wary of the proposed pipeline and deep-water port. According to the Canadian Broadcasting Corporation (CBC), the Assembly of First Nation Chiefs in New Brunswick opposes both projects because it has "serious concerns over negative environmental impacts" they could have on the aboriginal fishery in the Bay of Fundy.
The New Brunswick group said it also is worried about the projects' possible impact on its ability to exercise constitutionally protected aboriginal and treaty rights to generate a livelihood from fishing. "But this isn't just a First Nations issue, nor is it limited to just the salmon," Chief George Ginnish, the assembly's Mi'kmaq co-chair, told the CBC. "There are a lot of people in non-aboriginal fishing villages along the Fundy coast who could suffer if the protection of the environment is not at the forefront of this Canaport expansion."
TransCanada, sensing the potential concerns of various stakeholders, has been meeting privately with First Nations leaders and publicly with other potentially affected stakeholders for months, spokesman Philippe Cannon told Industrial Info in an interview. "The Energy East pipeline crosses over 150 First Nations communities, and we started engaging with them months ago," he said. "We have had an absolutely positive response" from the dozens of meetings TransCanada has had with First Nations leaders. "Everything is going well. We have positive relations with First Nations communities across the country, and those communities generally support the Energy East project."
TransCanada has scheduled about 60 "open house" meetings across six Canadian provinces to provide information on the pipeline to the public. About 30 of those open house meetings have been held so far, and the balance are scheduled to take place later this month and in October.
"The other day we had 260 people come to our open house meeting in Edmundston, New Brunswick, and over 200 people went to our meeting in Saint John, New Brunswick," Cannon continued. "We are pretty happy with how things are going."
View Plant Profile - 2017421 1025152 1018906 1039823 1019530 1065639 2017421 1056730 1061287
View Project Report - 300113972 300114104 300114110 300114114 300114117 300069119
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
