Reuters: Regulatory News: UPDATE 1-TransCanada moves forward on West-East oil pipeline plan

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UPDATE 1-TransCanada moves forward on West-East oil pipeline plan Apr 2nd 2013, 13:46 Tue Apr 2, 2013 9:46am EDT * TransCanada begins to seek commitments for pipeline plan * Plan could eliminate import needs of refineries out east * Pipeline could come into service in late 2017 TORONTO, April 2 (Reuters) - TransCanada Corp said on Tuesday it has begun to seek commitments from parties interested in transporting crude oil from Western Canada to Eastern Canadian markets, as it moves ahead on a plan to convert an existing natural gas pipeline. Calgary, Alberta-based TransCanada said its Energy East Pipeline will have the capacity to transport as much as 850,000 barrels of crude oil per day, greatly enhancing producer access to markets in Eastern Canada. The project could potentially eliminate Canada's reliance on the higher priced crude oil that it currently imports to supply east coast refineries. In 2012, Canada imported more than 600,000 barrels per day to supply its Eastern refineries. Earlier this year, TransCanada Chief Executive Russ Girling said TransCanada would soon hold an open season, or a call for commercial support for the project, and he expects a "very favorable response" from oil producers and refiners. TransCanada said it intends to seek regulatory approvals to construct and operate the facilities, after the open season ends. The line could come into service in late 2017. The plan to ship Alberta crude to markets in Eastern Canada has taken on even more significance as the U.S. government delays approval of TransCanada's Keystone XL pipeline that would ship crude from Alberta oil sands to Texas. Northern Gateway, a pipeline that would ship oil to the Canadian Pacific coast, is also hugely controversial, and there's no clues when it might go ahead. The land-locked Western Canadian province of Alberta is home to one of the world's largest crude oil deposits. But Alberta's crude, which currently has no direct pipeline access to Quebec and other markets in Eastern Canada, has been trading at a deep discount to U.S. crude due to limited export capacity and a glut of supply in its traditional U.S. Midwest market, although that discount narrowed recently. A wide discount strains both oil producers' bottom lines and the Alberta government's revenues, making the prospect of a pipeline to Eastern Canada attractive to producers and refiners. TransCanada said its project would convert some 3,000 kilometers (1,865 miles) of existing natural gas pipeline capacity to crude oil service. It would construct up to about 1,400 kilometers of new pipeline. Its rival Enbridge is also planning to get Western Canadian crude to Montreal and points East by reversing the flow of a pipeline that runs to Sarnia, Ontario. TransCanada said its open season for shippers to express interest in using the new line will begin on April 15, 2013 and will close on June 17, 2013. The company said it is beginning talks with Aboriginal groups and with other stakeholders and starting initial design and planning work for the project. Link this Share this Digg this Email Reprints

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