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OTTAWA — TransCanada Corp. has moved a major step forward on its plan to ship Western Canadian crude to the country’s eastern refineries and export facilities, so far facing few of the political hurdles that have dogged other pipeline projects aimed at moving crude out of Alberta.
The Calgary-based pipeline giant said Tuesday that it has launched a formal process to acquire shipping commitments from energy companies for the Energy East Pipeline, which could reach New Brunswick’s Irving Oil Ltd. refinery and port of Saint John.
TransCanada said it is confident in gaining such support, and will then file for regulatory review with the goal to begin shipments by late 2017.
“We’re committed,” said Jeff Matthews, Irving Oil’s director of business development. The proposed pipeline “increases our ability to compete in a tough industry by allowing our refinery access to a crude supply region in Western Canada that has not been accessible in the past,” he said.
The west-to-east project – unveiled just a year ago – is gaining considerable momentum at a time when other pipeline projects such as TransCanada’s Keystone XL and Enbridge Inc.’s Northern Gateway face uncertainty amid political friction and environmental concerns.
Energy East is expected to largely handle light oil, along with some heavy crude from the oil sands. As a result, projects such as the Keystone XL and Northern Gateway pipelines will still be needed to bring Alberta’s vast oil sands reserves to market.
The proposed Energy East Pipeline would carry as much as 850,000 barrels a day of western crude to eastern markets, with an option of either stopping in Quebec or extending it to Saint John. At its maximum, it would be 4,400 kilometres long, including the conversion of TransCanada’s underutilized natural gas line to a point near the Ontario-Quebec border, and new construction from there to Saint John.
The Saint John facility is Canada’s largest and most complex refinery. Mr. Matthews said oil producers are also interested in accessing Irving’s Canaport marine terminal for export.
With support from a wide range of politicians, Energy East now faces the acid test of commercial viability as producers weigh competing projects and the appeal of various markets.
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