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TransCanada Files NEB Application for Energy East Pipeline

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TransCanada Corp. marked a new milestone in the development of its $12 billion Energy East Pipeline by filing a formal project application with the Canadian National Energy Board of Canada (NEB). The detailed application for the approximately 1.1 million barrel per day (bpd) pipeline is the result of more than 18 months of environmental studies, engineering work and public consultation, making it one of the most extensive regulatory applications in TransCanada’s history. This multi-billion dollar project will enhance Canada’s energy security while providing thousands of jobs and billions of dollars for the Canadian economy.

“Not since the construction of the Canadian Mainline has there been an opportunity to connect the vast energy resources from western Canada to eastern Canadian markets,” said Russ Girling, TransCanada’s president and CEO. “This is a project that will help support thousands of jobs across the country and generate billions of dollars in government tax revenues over both the short- and long-term. It will provide the safest and most efficient access to markets for Canada’s growing crude oil production, ensuring we realize the greatest value for our natural resources. Energy East will also eliminate the need for Eastern Canada to import most of the 700,000 barrels it consumes every day.”

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The Energy East Pipeline project application is a stage in a multi-step regulatory process to receive the necessary approvals to convert an existing natural gas pipeline to crude oil service, construct new facilities and operate the pipeline and terminal facilities. Within the pages of the 70 printed binders filed with the NEB are specific details on environmental planning measures, design and construction methods for safe operations, findings from an independent environmental and socio-economic assessment, and details on discussions with more than 7,000 individuals, 5,500 landowners and 158 First Nation and Metis communities across six provinces.

TransCanada has also filed environmental assessment studies with the Ministère du Developpement durable, de l’Environnement et de la Lutte aux changements climatiques du Québec (MDDELCC) for the marine terminal and storage facility planned for Cacouna. As announced on March 4, TransCanada has agreed to voluntarily engage the BAPE process and will, as part of that collaboration, address environmental issues related to the pipeline facilities planned for Quebec, based on the environmental and socio-economic assessment prepared for the NEB.

“Our application outlines how Energy East will be built and operated in a safe and environmentally responsible manner, while generating significant benefits for all Canadians,” Girling said. “We have been out in the field for more than 18 months gathering data, performing environmental studies and engaging with Aboriginal and stakeholder groups in the initial design and planning of the project. This extensive regulatory application is a result of that effort and of the effort of thousands of hard-working and dedicated individuals involved in its development across the country.”

The application contains a breakdown of the latest job and economic benefits for the full scope of both the Energy East Pipeline Project and the proposed Eastern Mainline Pipeline Project based on new studies by the Conference Board of Canada and IHS. The studies conclude that Energy East will:

  • Make eastern Canadian refineries more competitive by allowing them to eliminate their reliance on more expensive crude oil imported from outside Canada.
  • Support an average of approximately 14,000 direct and indirect full-time jobs across Canada during development and construction.
  • Generate more than $7 billion in additional tax revenues after the first 20 years of operation for local, provincial and federal governments, along with billions of dollars in economic activity across the country.

The Energy East Pipeline Project involves converting approximately 3,000 km of TransCanada’s existing Canadian Mainline system from natural gas to crude oil transmission service and constructing approximately 1,600 km of new pipeline. The pipeline will transport crude oil from receipt points in Alberta and Saskatchewan to refineries in Montréal and Lévis, Québec and to a proposed new marine terminal in Cacouna, Québec. The pipeline will terminate in Saint John, New Brunswick at the Irving oil refining complex which is the largest in Canada and one of the 10 largest refineries in North America. In addition, TransCanada and Irving Oil Co. Ltd. have formed a joint venture to build, own and operate a new deep water marine terminal.

Converting one of the pipelines in the Canadian Mainline natural gas transmission system to crude oil service will make better use of capacity on the Canadian Mainline that is no longer needed to export natural gas to the United States. Along with the Energy East Pipeline Project application, TransCanada also filed an application to build and operate the Eastern Mainline Pipeline Project in southern Ontario. The proposed $1.5 billion, 600 million cubic feet per day (MMcf/d) project will provide an additional 250 km of natural gas pipeline in an area where the demand and need are strong — the Toronto-to-Montréal corridor — providing greater access to affordable new natural gas supplies from the northeastern United States. The combination of the conversion of 3,000 km of existing natural gas infrastructure and the construction of the Eastern Mainline Pipeline Project will result in savings of approximately $950 million in transmission costs over the next 15 years for Canadian Mainline natural gas shippers.

“Whether it is oil, natural gas or electricity, TransCanada prides itself on the safe and reliable delivery of energy products to markets where they are needed,” Girling said. “I am very proud of that fact and of the work our employees undertake each day to ensure our pipelines and infrastructure systems safely deliver the energy Canadians have come to depend on. I can tell you without a doubt, that no one has a stronger interest than we do in ensuring the safe operation of our systems. It is something where we simply will not compromise.”

In addition to emergency response plans developed with local emergency response agencies along the pipeline’s entire route, safety measures planned for Energy East include conducting thorough inspection and upgrade work to existing pipe to ensure its safe conversion to crude oil transportation and placing automatic shut-off valves and using thicker-walled pipe near major water bodies. All of TransCanada’s oil pipelines are monitored 24 hours a day by a state-of-the-art control system, allowing highly-trained operators to stop the flow of oil within minutes if necessary.

The Energy East Pipeline Project is expected to cost approximately $12 billion, excluding the transfer value of Canadian Mainline natural gas assets, and is anticipated to be in service for deliveries in Québec and New Brunswick by late 2018, subject to receiving the necessary regulatory approvals and permits. The project has secured more than 900,000 bpd of firm, 20-year shipping contracts and is an important element of TransCanada’s $39 billion capital program.

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