Alberta, the Canadian province with the world’s third-largest crude reserves, made a C$5 billion ($4.75 billion) commitment to ship oil on a pipeline proposed by TransCanada Corp. (TRP) to the Atlantic Coast.
The provincial government booked capacity in March to transport as much as 100,000 barrels a day on the proposed Energy East plan that would convert part of TransCanada’s natural gas mainline into an oil conduit. Tolls paid by the government would amount to about C$5 billion over 20 years, the Alberta Energy Department said in a report on its website.
Canadian producers are backing new pipelines to North America’s coasts to access higher oil prices. Heavy crude from Canada’s oil sands traded at $15.75 a barrel less than U.S. crude grade West Texas Intermediate yesterday, according to figures compiled by Bloomberg.
TransCanada is considering whether to proceed with Energy East, after a successful process to secure commercial support ended last month, Grady Semmens, a company spokesman, said in an e-mail today. The pipeline would deliver 850,000 barrels a day of oil from western Canada to Quebec in late 2017, with shipments to the Atlantic Coast province of New Brunswick starting in 2018, he said.
Alberta has the third-largest proven oil reserves in the world, after Saudi Arabia and Venezuela, according to the provincial government.
To contact the reporter on this story: Rebecca Penty in Calgary at firstname.lastname@example.org
To contact the editor responsible for this story: Susan Warren at email@example.com