TransCanada Calls Energy East Pipeline ‘Very, Very Promising’

TransCanada Corp., builder of the Keystone XL pipeline, may announce shortly that it will go ahead with a separate link to transport oil to Canada’s Atlantic Coast, Chief Executive Officer Russ Girling said.

Advancing Energy East, a 4,400-kilometer (2,735-mile) partial conversion of its Mainline natural gas line, looks “very, very promising,” Girling said today in an interview at Bloomberg headquarters in New York. The company finished receiving binding commitments from shippers on June 17 and is working through contractual details, he said.

“Hopefully in the near term, we’ll be in a position to announce a project going to the east coast, but it won’t be tied to Keystone,” Girling said. “I think we’re going to need Keystone, I think we need an Energy East.”

TransCanada’s $5.3 billion Keystone XL and Energy East are among several proposed pipelines designed to ease congestion from booming oil-sands projects and move the fuel from Alberta to refineries. Oil-sands output is forecast to more than double to 5.2 million barrels a day by 2030, according to the Canadian Association of Petroleum Producers.

The Energy East proposal involves carrying as much as 850,000 barrels a day of crude from western Canada to refineries in Montreal, Quebec, and Saint John, New Brunswick, about 400 miles northeast of Boston. The crude could then be shipped by tanker to facilities on the U.S. Eastern Seaboard and as far away as India, Girling said. The oil will predominantly be upgraded bitumen from the oil sands, a light crude, and light oil from Saskatchewan, the CEO said.

“Will we overbuild the pipeline infrastructure? Potentially, because the economics dictate that that makes sense, to buy the additional assurance to make sure you have access to markets at all time,” Girling said.

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