You would be hard-pressed to get any U.S. or Canadian citizen to name a single other midstream project besides the Keystone XL Pipeline under development, but that doesn’t make the project the be-all/end-all of TransCanada Corp.'s business strategy and operations.
The strength of TransCanada is that despite tremendous delays in securing an approval decision on the project from the U.S. government, the company continues to perform strongly.
Indeed, in early August, the company announced it was proceeding with a project that is larger and more expensive than the Keystone XL. The 2,700-mile Energy East Pipeline will move up to 1.1 million barrels (bbl.) per day of crude oil from western Canada to eastern Canadian refineries and export terminals. The project is expected to cost $12 billion and will convert a 1,864- mile portion of the natural gas pipeline capacity on the company’s Canadian Mainline pipeline as well as construct 870 miles of new pipe.
Crude will be transported from Alberta and Saskatchewan to delivery points in Montreal and Quebec City and terminate at Canaport in Saint John, New Brunswick. The Canaport terminal will also house a new deepwater marine terminal that TransCanada is developing with Irving Oil. Russ Girling, TransCanada’s president and chief executive, stated that marine access would allow Canadian producers to sell crude to more lucrative Asian markets, such as India, where they can compete with production out of the Middle East and Africa.
The project was originally projected to provide up to 850,000 bbl. per day of transportation capacity, but after TransCanada received firm 20-year commitments from shippers for 900,000 bbl. per day, the scope was expanded.
“We are very pleased with the outcome of the open season for the Energy East Pipeline held and are excited to move forward with a major project that will bring many benefits across Canada,” Girling said during a conference call to discuss the project.
The project is expected to be brought online by late-2017 for deliveries in Quebec and 2018 for deliveries to New Brunswick.
The company anticipates submitting requests to the Canadian government for the project in 2014, but opposition will likely be fierce. First Nations and environmental groups have built strong opposition in Canada to other projects designed to transport crude from the West Coast to the East Coast. It is not clear at this time whether the recent derailment in Lac-Mégantic, Quebec, of a Montreal, Maine & Atlantic Railway Inc. train transporting crude would have any impact on the Quebec legislature supporting or opposing the Energy East Pipeline. However, the project is supported by both the Alberta and New Brunswick governments.
In addition to transporting Canadian crude, Girling said that the pipeline could result in some volumes currently being trans- In The Pipeline 26 September 2013 MidstreamBusiness.com Russ Girling MidstreamBusiness.com September 2013 27 ported by rail out of the Bakken. In this scenario, the company would collect Bakken shale volumes at its oil storage terminal currently under construction in southeast Saskatchewan and transport them to Canada’s East Coast via the Energy East Pipeline.
“Obviously, we've had some interest from U.S. parties, which we’ll continue to pursue," Girling said during the conference call. Although some interpreted the news of the Energy East project moving forward as meaning TransCanada was turning away from the Keystone XL, he said this was definitely not the case and that there was a need for both.
What has been largely ignored by the mainstream press is that the base Keystone pipeline has safely delivered more than 400 million bbl. of oil to refineries in Illinois and Oklahoma in three years of operation. During a conference call to discuss second-quarter 2013 earnings, Girling pointed out that the review for the original Keystone pipeline project, which is nearly identical to Keystone XL project in scope, took only 21 months.
Clearly the antagonism and outcry from some sectors of the public against the project are not focused on the project itself, but on the development of tar sands and the hydrocarbon industries. Many studies have been commissioned and completed and have found that the pipeline will utilize state-ofthe- art technology and be one of, if not, the safest pipelines in the world if it were to come online. Studies have also touted the project’s large economic benefits to both Canada and the U.S.
Thus far, TransCanada has spent $1.8 billion on the Keystone XL project and estimates that the total cost will increase from its current projection of $5.1 billion depending on when approval would be granted. “The project is really sitting on the fiveyard line and everyone is fully committed [to getting approval],” Alex Pourbaix, president of TransCanada’s energy and oil pipelines, said during the second-quarter conference call.
DUG Haynesville: Bob Barba Sells Refracs to Extend Wells, Protect Parent Wells [WATCH]
2023-03-29 - In an exclusive interview, Bob Barba, president and CEO, Integrated Energy Services Inc., sees hesitancy around refrac-ing vintage wells, despite revitalizing older wells and even those consigned to plugging and abandonment in the Haynesville and Eagle Ford shale and, particularly, the Permian Basin.
DUG Haynesville: E&Ps Keeping Production Flat, Hedging Amid Gas Price Slump
2023-03-29 - Executives from E&Ps such as GeoSouthern Energy and New ASEAN Energy said they are adjusting drilling and hedging strategies in the Haynesville Shale after a rapid collapse in U.S. natural gas prices.
Marketed: FX Energy Group 6-Well Package
2023-03-29 - FX Energy Group LLC retained EnergyNet for a 6-well package plus 2,042.46 Net HBP leasehold acres in Hartley and Oldham Counties, TX.
Sunverge, Eaton Announce Collaboration on Home EV Charging Infrastructure
2023-03-29 - Sunverge Energy’s virtual power plant platform and Eaton’s electric vehicle charging solutions will enable utility management for home charging.
A&D Minute: International Players Take Interest in US Shale [WATCH]
2023-03-29 - Also in this week’s A&D Minute, Super Energy Services considers potential merger acquisitions and CorEnergy plans to sell two natural gas midstream systems.