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OTTAWA and CALGARY — TransCanada Corp. and Irving Oil Ltd. are joining forces to market Canada’s crude oil to the world, officially launching the proposed $12-billion Energy East pipeline and a $300-million deep-water marine terminal to be built off Saint John, N.B.
The Energy East pipeline, subject to regulatory approval, promises to unlock new markets for landlocked Western Canadian suppliers by giving them access to eastern refineries and global export markets through ports at Quebec City and Saint John.
TransCanada chief executive Russ Girling said the company expanded its original plan to 1.1-million barrels per day of capacity – about a third of current Canadian oil production – after Irving Oil successfully promoted the ambitious export option to energy producers.
Echoing politicians backing the plan, Mr. Girling described Energy East – the largest project ever undertaken by TransCanada – in nation-building terms, comparing it to the construction of the Canadian Pacific Railway or the Trans-Canada Highway.
“Each of these enterprises required innovative thinking and a strong belief that building critical infrastructure ties our country together, making it stronger and more in control of our own destiny, and this is true of Energy East,” he said.
For the family-owned Irving company, the pipeline represents a critical new source of oil for its refinery.
“Canada has the world’s third-largest basin of oil reserves, and it’s the only major basin of oil reserves in the world that’s not connected to a major deep-water port,” Irving Oil president Paul Brown said in a telephone interview from Saint John. “And so we do feel that when this pipeline and marine terminal is put in place and Western Canadian crude has access to a deep-water port, there is going to be a substantial opportunity for us and our partner.”
The oil terminal will be built at the Irving-owned Canaport facility, which now imports liquefied natural gas but is to be converted to handle LNG storage and exports. Mr. Brown said TransCanada and Irving have been talking to potential buyers of Canadian crude as far away as Asia and are confident there will be demand for the exports.
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