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TransCanada seeks 30-day suspension of Energy East, Eastern Mainline project applications

TransCanada seeks 30-day suspension of Energy East, Eastern Mainline project applications

Photo by Bloomberg

8th September 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – Oil and gas infrastructure company TransCanada said the viability of its Energy East pipeline and Eastern Mainline projects is in doubt after the Canadian National Energy Board (NEB) last month released a broader scope under which the environmental assessments (EAs) for the two projects will be dealt with.

The TSX- and NYSE-listed oil and gas major has asked the NEB to suspend its applications for 30 days in an effort to stop the clock on the NEB’s application processing timeline, while giving TransCanada time to conduct a careful review of the changes announced by the NEB on August 23, regarding the list of issues and EA factors of the projects, while understanding how these changes impact the projects' costs, schedules and viability.

Owing to the changes, TransCanada will cease recording Allowance for Funds Used During Construction on the projects effective August 23.

Should TransCanada decide not to proceed with the projects after a thorough review, the carrying value of its investment in the projects as well as its ability to recover development costs incurred to date would be negatively impacted, the company warned on Thursday.

"Apart from Energy East, we will continue to advance our $24-billion near-term capital programme in addition to our longer-term opportunities. Our portfolio of high-quality projects is expected to generate growth in earnings and cash flow to support an expected annual dividend growth rate at the upper end of an 8% to 10% range through 2020,” stated president and CEO Russ Girling.

The NEB plans to hear the Energy East and Eastern Mainline project applications together through a coordinated hearing. Following a public comment period, the NEB on May 10 issued for comment draft versions of its list of issues and environmental assessment (EA) factors document for each of the projects.

The board said it had received about 820 submissions, including about 700 form letters. It read and considered all submissions in finalising the expanded lists of issues and EA factors documents for the projects, which were published on august 23.

The hearing panel noted the public’s interest in better understanding the risks associated with potential accidents and system malfunctions that may, for example, lead to an oil spill into the environment. As a result, the assessment will provide more visibility to the evaluation of such scenarios, their potential consequences, the proposed mitigation and response measures, as well as the preventative programmes aimed at reducing or eliminating risk factors, the NEB said in a statement.

Additional issues identified include consideration of greenhouse gas (GHG) emissions for both projects; the impact of GHG laws and policies on both projects; the potential effects of power lines, in the case of the Energy East project; and potential effects of project-related marine shipping, also related to the Energy East project.

Energy East is a 4 500 km pipeline proposed to carry 1.1-million barrels of crude oil per day from Alberta and Saskatchewan, to refineries in Eastern Canada and a marine terminal in New Brunswick.

The Eastern Mainline pipeline is a proposal to build about 279 km of new gas pipeline and related components, beginning near Markham, Ontario, and finishing near Brouseville, Ontario.

Edited by Creamer Media Reporter

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