TransCanada Seeks New Export Markets by Going Ahead with Major Oil Pipeline Linking Western Canada to Refineries, Terminals in the East

TransCanada will construct a pipeline from western Canada to link it with the east's refineries in its bid to seek more export markets. Once complete, the $11.6 billion Energy East line could transport up to 1.1 million barrels of oil daily.

It would run from Hardisty, Alberta, to a new deep-water marine terminal in St John, New Brunswick, linking 3,000 kilometres of an existing natural gas pipeline with 1,400 kilometres of newly constructed pipeline.

"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," TransCanada Chief Executive Russ Girling said in a statement.

By moving the oil using the pipelines, the project would supply refineries in eastern Canada that presently process 750,000 barrels of imported foreign oil daily.

Up to 82 per cent of oil refined in the country's Atlantic region and 92 per cent of oil piped to refineries in Quebec is imported from other countries of regions. TransCanada estimates that it would begin to pipe oil to Quebec by late 2017 and New Brunswick by 2018.

TransCanada's other $7 billion pipeline project to the U.S., the Keystone XL line from Alberta to Texas, is encountering stiff opposition from green groups. The U.S. State Department is anticipated to issue a final report on the Keystone XL pipeline before the end of 2013.

Despite TransCanada's problem with Keystone, Mr Girling wants to have more pipeline projects that would bring Canadian oil sources from its asphalt fields to other North American markets.

University of Calgary business professor Bob Schultz emphasised that the new east line pipe is not a backup plan for the troubled Keystone XL project since there is sufficient demand in Alberta for oil transportation to justify several more pipeline projects.

New pipelines would help move the expected rise in Canadian oil production to 3.7 million barrels per day by 2025 from the current 1.5 million barrels.

Expected to benefit the most from the new TransCanada project is the 228-year-old city of St John, the oldest in Canada, granting that the company could get the necessary regulatory and environmental permits for the venture.

But even the east line venture is also facing some blocks such as the unpredictable nature of Quebec politics, warned Robert Page, a professor at the University of Calgary's Institute of Sustainability, Energy, Environment and Economy.