Alberta makes Cdn$ 5 billion commitment TransCanada oil pipeline

The province of Alberta has made a Cdn$ 5 billion commitment to pump oil on a pipeline proposed by TransCanada Corp. to the Atlantic Coast.

The company’s proposed Energy East plan would convert part of TransCanada’s natural gas mainline into an oil conduit. It was announced this week that the Alberta government booked capacity in March to transport as much as 100 000 bpd. Tolls paid by the government would amount to around Cdn$ 5 billion over 20 years, the Alberta Energy Department said in a recent report.

Backing new pipelines

In order to access higher oil prices, Canadian producers are supporting new pipelines to North America’s coasts. Currently, heavy crude from Canada’s oilsands trades at US$ 15.75/barrel less than US crude grade West Texas Intermediate, according to Bloomberg.

According to Grady Semmens, a TransCanada Spokesman, the company is considering whether to proceed with Energy East, after a successful process to secure commercial support ended last month. The pipeline would deliver 850 000 bpd of oil from western Canada to Quebec in late 2017, with shipments to the Atlantic Coast province of New Brunswick starting in 2018, Semmens added.

Three major components

The Energy East Pipeline Project involves three major components: pipeline conversion, the construction of new pipeline and the construction of new pipeline facilities. Energy East will make use of an existing natural gas pipeline and will convert the pipeline to oil service. New sections of pipe will also need to be constructed in Alberta, Saskatchewan, Eastern Ontario, Québec and New Brunswick to link up with the newly converted pipe. Lastly, associated facilities such as pump stations, tank terminals and marine facilities will be constructed in order to successfully move the crude oil from Alberta to New Brunswick and beyond.

According to the provincial government, Alberta has the third largest proven oil reserves in the world, after Saudi Arabia and Venezuela.

Edited from various sources by Cecilia Rehn.

Read the article online at: https://www.worldpipelines.com/business-news/05072013/alberta_makes_cdn_5_billion_commitment_transcanada_oil_pipeline/