TransCanada cancels Energy East oil pipeline
The TransCanada Corporation has announced that it will no longer be proceeding with the proposed Energy East Pipeline and Eastern Mainline projects.
“After careful review of changed circumstances, we will be informing the National Energy Board that we will no longer be proceeding with our Energy East and Eastern Mainline applications,” said TransCanada president and CEO Russ Girling.
“TransCanada will also notify Quebec’s Ministère du Developpement durable, de l’Environnement, et Lutte contre les changements climatiques that it is withdrawing the Energy East project from the environmental review process,” Girling continued.
“We appreciate and are thankful for the support of labour, business and manufacturing organiSations, industry, our customers, Irving Oil, various governments, and the approximately 200 municipalities who passed resolutions in favour of the projects. Most of all, we thank Canadians across the country who contributed towards the development of these initiatives.
“We will continue to focus on our $24 billion near-term capital program which is expected to generate growth in earnings and cash flow to support an expected annual dividend growth rate at the upper end of an eight to 10 per cent range through 2020.”
If completed, the Energy East Pipeline would have taken crude oil from Alberta and transport it refineries in the east of the country and a marine terminal Saint John.
As a consequence of the decision not to continue with the project, TransCanada is reviewing its approximate $1.3 billion carrying value, including allowance for funds used during construction and capitalised since conception, and expects a $1 billion after-tax-non-cash charge will be recorded in the company’s fourth quarter results.
In September, TransCanada announced that it was suspending the Energy East Pipeline project in order to get regulatory approvals. Since its announcement, the proposed pipeline had been a controversy. Supporters said it was vital to expand the markets for oil extracted from Alberta and reduce reliability on shipments to the US, while detractors pointed to potential environmental impacts of such a massive pipeline.