Name and Location
Energy East pipeline project, Canada.

Client
TransCanada.

Project Description
The 4 600 km Energy East pipeline project will transport 1.1-million barrels of crude oil a day from receipt points in Alberta and Saskatchewan to Saint John, in New Brunswick, with additional delivery points in Montreal and the Quebec city region.

The plan is to convert about 3 000 km of TransCanada’s existing Canadian Mainline natural gas system into an oil service and build up to 1 600 km of new pipeline to transport the crude oil.

The project involves three significant components. Energy East will convert an existing natural gas pipeline into an oil service between Burstall, in Saskatchewan, and Cornwall, in Ontario. New sections of pipeline will also need to be built in Alberta, Saskatchewan, Manitoba, Eastern Ontario, Quebec and New Brunswick to link up with the newly converted pipe.

The project will also require associated facilities, such as pumpstations, tank terminals and marine facilities, to successfully transport the crude oil from Alberta to New Brunswick and access new markets.

The pipeline will include four oil tank terminals, 65 to 70 pumpstations and two marine-tanker loading facilities.
The pipeline will terminate at Canaport in Saint John, New Brunswick.

Value
The project is expected to cost $15.7-billion.

Duration
Construction will start once all the necessary regulatory approvals have been received, with the pipeline slated to be in service by 2020.

Latest Developments
Canada’s National Energy Board (NEB) has officially started its investigation into the controversial Energy East pipeline project, saying the process will be the most innovative in the board’s history.
TransCanada is hoping that the pipeline will open new markets for Canadian oil, moving about 1.1-million barrels of Alberta and Saskatchewan crude to refineries in Eastern Canada and an export terminal in New Brunswick.
The project has stirred opposition and support for the project. While the oil industry and the premiers of Alberta, Saskatchewan and New Brunswick have expressed strong support for the project, some politicians, many environmental groups and several First Nations are strongly opposed to the project.
Starting on August 8 in Saint John, New Brunswick, the first of several panel sessions will take place along the route in New Brunswick, Québec, Ontario, Manitoba, Saskatchewan and Alberta, the NEB has advised.
These sessions will be the first opportunity for hearing participants to provide comments and to ask questions about the Energy East project.
The NEB has advised that the hearing panel will assess greenhouse-gas (GHG) emissions directly related to the construction and operation of the pipeline. Environment and Climate Change Canada will calculate expected upstream GHG emissions, providing the information for the Federal Cabinet to factor into its final decision.
The NEB will concurrently conduct a review of TransCanada’s Eastern Mainline project.
“Given the connections between the two projects, the board determined that the two applications would be most effectively assessed within a single hearing,” the NEB has said in a release.
The Eastern Mainline is a proposal to build about 279 km of new gas pipeline and related components in four sections, beginning near Markham, Ontario and finishing near Brouseville, Ontario. Eastern Mainline would enable TransCanada to continue to meet its commercial obligations should the Energy East project be approved, because part of its existing gas infrastructure would be converted to carry oil.
Meanwhile, the new Pipeline Safety Act has come into force in Canada, heralding a new era of absolute liability for pipeline owners and operators, and setting out financial resource requirements to pay for all costs related to a spill or rupture.
The NEB has welcomed the Act, which first received Royal Assent on June 18, 2015. This also resulted in changes to the NEB Act and, to some extent, the Canada Oil and Gas Operations Act.
“These legislative changes enhance and strengthen our mandate to provide life-cycle oversight of federally regulated pipelines, from construction to abandonment,” NEB chairperson Peter Watson has stated.
According to the NEB, the most significant changes to the Pipeline Safety Act (Bill C-46) relate to absolute liability and financial resource requirements, abandonment, pipeline releases, damage prevention, as well as audit and enforcement powers.
The absolute liability provisions in the Act apply to the company that owns the pipeline, not landowners or other companies such as incorporated farms.
The NEB states that it will hold the company that owns the pipeline, and not farmers or other parties, responsible for any clean-up costs in the event of a spill or rupture.
The Pipeline Safety Act provides improved provisions for damage prevention, which lays out obligations for those planning the construction of facilities, ground disturbance activities or vehicle or mobile equipment crossings in the area of an NEB-regulated pipeline, as well as the obligations of pipeline companies.
Further, the NEB’s jurisdiction has also been expanded to provide oversight of pipelines post-abandonment. Companies will remain liable for post-abandonment costs and damages.
It also provides the NEB with new powers for inspection officers, and new authority to assume control of an abandoned pipeline if a company is not complying with a NEB order.
Under the new regulations, the Governor in Council has the authority, in the event of a pipeline release, to ‘designate’ a company if it either did not have the ability to pay for the release or did not comply with a board order, and for the NEB to take over spill response.
The Act has further instituted new measures to help ensure that pipeline companies hold enough financial resources to pay these types of costs in the event of a spill or rupture.
NEB-regulated companies operating pipelines that have the capacity to transport at least 250 000 bbl/d of oil will from now on be liable for all costs and damages for an unintended release of up to C$1-billion, regardless of fault.
Currently, five companies will be subject to the C$1-billion absolute liability, including Enbridge Pipelines, Enbridge Pipelines (Westspur), Express Pipeline, TransCanada Keystone Pipeline and Trans Mountain Pipeline.
Other projects that would fall under the new liability regulations, should they be approved, include TransCanada’s Energy East pipeline project and Kinder Morgan’s Trans Mountain pipeline expansion project.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
TransCanada investor and analyst enquiries, David Moneta, tel +1 403 920 7911 or email EnergyEast@TransCanada.com.