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Released October 06, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--TransCanada Corporation (NYSE:TRP) (Calgary, Alberta) said Thursday it was pulling the plug on the Energy East and Eastern Mainline pipeline projects in the face of tougher regulatory reviews. The pipelines would have delivered oil and natural gas from Western Canada to the eastern part of the country. But the company said it would continue to focus on its C$24 billion (US$19 billion) near-term capital program, which includes the Keystone XL pipeline. Even without Energy East and Eastern Mainline, Industrial Info is tracking nearly 200 active TransCanada projects.
Chief Executive Officer Russ Girling said in a press statement that TransCanada would tell Canada's National Energy Board (NEB) that it would no longer proceed with its applications for the two projects. TransCanada said it will record an estimated C$1 billion (US$850 million) after-tax non-cash charge in its fourth-quarter results due to its termination of the projects.
"In light of the project's inability to reach a regulatory decision, no recoveries of costs from third parties are expected," the company said.
In September, TransCanada asked for a 30-day suspension of its project applications after the National Energy Board said it would toughen its review process to include consideration of upstream and downstream greenhouse gas emissions resulting from the pipelines. For related information, see September 11, 2017, article - TransCanada Seeks to Slow Pipeline Application Amid Tougher Review.
The Canadian Energy Pipeline Association (CEPA) said in a press statement that the "loss of this major project means the loss of thousands of jobs and billions of dollars for Canada, and will significantly impact our country's ability to access markets for our oil and gas."
CEPA went on to say the NEB's decision to include greenhouse gas emissions in its considerations "is evidence of how a lack of clarity and an unclear decision-making process regarding pipeline projects in Canada are challenging the energy sector's ability to be competitive in the world market."
With a total investment value of nearly $13 billion, Energy East would have moved crude oil to Canada's east coast for potential export to foreign markets. The project includes construction of grassroot sections of pipeline along the proposed 2,800-mile route, to transport up to 1.1 million barrels per day (BBL/d). For more information, see Industrial Info's project reports on the grassroot sections in Alberta, Ontario and Quebec. The pipeline would end at a proposed marine terminal in Saint John, New Brunswick, which would have twenty-two 600,000-barrels tanks and pump packages with a maximum injection/takeaway flow rate of 3.1 million BBL/d. For more information, see Industrial Info's project report.
The 173-mile Eastern Mainline pipeline, meanwhile, would have moved up to 250 million cubic feet per day of natural gas within Ontario. For more information, see Industrial Info's project report.
TransCanada's Girling said the company would continue to focus on its near-term capital program through 2020. The $8 billion Keystone XL pipeline would move oil from Alberta to the U.S. Gulf Coast. President Donald Trump helped to revive the project, but it still faces a potential regulatory roadblock in Nebraska, where the state's Public Service Commission has yet to decide on the proposed route. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Chief Executive Officer Russ Girling said in a press statement that TransCanada would tell Canada's National Energy Board (NEB) that it would no longer proceed with its applications for the two projects. TransCanada said it will record an estimated C$1 billion (US$850 million) after-tax non-cash charge in its fourth-quarter results due to its termination of the projects.
"In light of the project's inability to reach a regulatory decision, no recoveries of costs from third parties are expected," the company said.
In September, TransCanada asked for a 30-day suspension of its project applications after the National Energy Board said it would toughen its review process to include consideration of upstream and downstream greenhouse gas emissions resulting from the pipelines. For related information, see September 11, 2017, article - TransCanada Seeks to Slow Pipeline Application Amid Tougher Review.
The Canadian Energy Pipeline Association (CEPA) said in a press statement that the "loss of this major project means the loss of thousands of jobs and billions of dollars for Canada, and will significantly impact our country's ability to access markets for our oil and gas."
CEPA went on to say the NEB's decision to include greenhouse gas emissions in its considerations "is evidence of how a lack of clarity and an unclear decision-making process regarding pipeline projects in Canada are challenging the energy sector's ability to be competitive in the world market."
With a total investment value of nearly $13 billion, Energy East would have moved crude oil to Canada's east coast for potential export to foreign markets. The project includes construction of grassroot sections of pipeline along the proposed 2,800-mile route, to transport up to 1.1 million barrels per day (BBL/d). For more information, see Industrial Info's project reports on the grassroot sections in Alberta, Ontario and Quebec. The pipeline would end at a proposed marine terminal in Saint John, New Brunswick, which would have twenty-two 600,000-barrels tanks and pump packages with a maximum injection/takeaway flow rate of 3.1 million BBL/d. For more information, see Industrial Info's project report.
The 173-mile Eastern Mainline pipeline, meanwhile, would have moved up to 250 million cubic feet per day of natural gas within Ontario. For more information, see Industrial Info's project report.
TransCanada's Girling said the company would continue to focus on its near-term capital program through 2020. The $8 billion Keystone XL pipeline would move oil from Alberta to the U.S. Gulf Coast. President Donald Trump helped to revive the project, but it still faces a potential regulatory roadblock in Nebraska, where the state's Public Service Commission has yet to decide on the proposed route. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
