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NEWS: TransCanada proposes East Coast pipeline for tar sands

The Globe and Mail reports, “TransCanada Corp. is proposing a major shift in the way oil moves across Canada, urging the oil patch to consider a massive $5.6-billion new pipeline system that would carry large volumes of western crude to refineries in Ontario, Quebec and beyond. The East Coast Pipeline Project, as TransCanada has dubbed it in presentations to energy companies, could do more than supply the east with fuels made from oil sands crude. …The TransCanada proposal would send 625,000 barrels a day across the country to Montreal, Quebec City and potentially Saint John, N.B., where Irving Oil Ltd. runs a large refinery. Tanker exports could then also take the crude to Europe or Asia.”

“The East Coast project, described to The Globe and Mail by industry sources, would involve converting roughly 3,000 kilometres of underused natural gas pipe – the Mainline is made up of a series of parallel pipes – into oil service. It would also involve building at least 375 kilometres of new pipe from Hardisty, the Alberta oil hub, to the Mainline at Burstall, Sask., and from near Cornwall, at the other end, to Montreal. Another 220 kilometres would be required to reach Quebec City. Oil could be loaded onto ocean-going vessels either on the St. Lawrence River (which connects the outflow of the Great Lakes to the Atlantic Ocean), or destined for American refiners via Portland, Me., through a pipeline to Montreal whose flow could be reversed.”

“The proposal is conceptual, and the company has not disclosed public details about a project that may never be built. But it comes amid a period of turbulence for the Canadian oil patch, which is confronting numerous obstacles to moving its oil to market, and is considering a large variety of novel options as a result. …Oil companies – especially in the oil sands – have grown fearful of being boxed in, as export projects like Gateway and Keystone XL, the proposed TransCanada line to the Gulf Coast, stumble.”

“In addition, Enbridge is working on plans to reverse its 240,000-barrel-a-day Line 9 pipeline. If approved, that pipe would move enough oil to feed both an Imperial Oil Ltd. refinery in Nanticoke, Ont., and a Montreal refinery run by Suncor Energy Inc. Enbridge has met with officials from refineries in Quebec City and Saint John to discuss their appetite for Western Canadian crude. Companies could barge oil from Montreal to Quebec City, and then perhaps ship it by rail to Saint John.”

More on this soon.