TransCanada Abandons Quebec Port for Energy East Pipeline

  • Company reiterates plan to supply Quebec refineries with crude
  • Quebec premier says hard to assess benefits without terminal

TransCanada Corp. is scrapping plans for a marine terminal in Quebec to go with its Energy East pipeline, ending months of debate about oil shipments on the St. Lawrence River that has delayed the project.

The company will amend its application with Canadian regulators for the C$12 billion ($9.1 billion) oil pipeline before the end of the year, TransCanada said Thursday in a statement. The project, which would carry 1.1 million barrels a day from Western Canada to a port on the Atlantic Coast, will still supply Quebec refineries owned by Suncor Energy Inc. and Valero Energy Corp.

“Today’s announcement demonstrates our dedication to listening and delivering a vital infrastructure project that will provide significant economic benefits to all provinces along the pipeline’s route,” Russ Girling, the Calgary-based company’s chief executive officer, said in the statement.

TransCanada had been studying alternative sites for a marine terminal in Quebec after abandoning plans in April for a facility in the town of Cacouna because of concerns about the threat to endangered beluga whales. Opposition from some groups to any shipments on the river made it tough to win support for another site. The issue has delayed the line, which is forecast to begin shipments in 2020 rather than the initial target of 2018.

Difficult Calculation

With the loss of a Quebec port, Premier Philippe Couillard said it’s more difficult to assess the economic benefits of Energy East for the province. TransCanada has said communities along the pipeline’s path would benefit from construction work and tax payments by the company over decades.

“With a deep-water port it’s quite simple to calculate benefits in terms of infrastructure, employment, etc.,” Couillard told reporters in Quebec City, according to a TV broadcast by Radio-Canada. “Without that, I’m not saying it’s impossible, but it’s more complicated.”

Energy East is among four major export oil pipelines planned from Canada that are being held up by environmental opposition and regulatory scrutiny, including TransCanada’s Keystone XL project that would transport Alberta crude to the U.S. Even with a price slump slowing development plans in the oil sands, producers are moving some crude by rail amid a lack of pipeline space to handle the growth.

TransCanada this week lost a bid to have the U.S. review of Keystone XL put on hold as it seeks regulatory approval for the route in Nebraska. Some analysts saw the request as an effort to avoid a likely rejection from President Barack Obama by having him pass the decision onto his successor, which the company denied. The U.S. State Department said Wednesday that after considering TransCanada’s request, it would continue its review.

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