TransCanada may abandon Energy East pipe facing tougher review
CALGARY, Alberta (Reuters) – TransCanada Corp (TO:TRP) seeks to suspend the necessary paperwork to its Energy East pipeline for Thirty days and could abandon the work, the provider said on Thursday, weeks after Canada's National Energy Board (NEB) announced a tougher review process.
TransCanada is going to do a "careful review" within the new assessment method to gauge its effect on the charges, schedules and viability of your pipeline into the Atlantic coast, the business said in a very statement.
The NEB in August expanded the scope of one’s energy East's review, saying it’s going to look at the project's indirect greenhouse gas contributions and will provide "more visibility" for the evaluation of risks regarding accidents like oil spills.
The regulator said on Thursday it’ll consider TransCanada's request to pause its Energy East application and definitely will choose "in a timely fashion."
Energy East, which may take crude from Canada's oil heartland of Alberta, would attain higher prices for Canadian producers, whose landlocked product trades inexpensively to the West Texas Intermediate benchmark.
Assessing indirect emissions have been opposed by TransCanada, which have referred to it as "completely redundant and unnecessary."
In a filing towards the regulator on Thursday, TransCanada also requested extra time on the deadline for filing Energy East updates to Oct. 27.
Should TransCanada abandon the project, "the carrying valuation on its investment … along with its capacity to recover development costs incurred as of yet would be negatively impacted," the corporation said.
TransCanada said hello continues to advance its other projects despite pausing Energy East.
Dirk Lever, a power infrastructure analyst at AltaCorp Capital in Calgary, said: "What they aspire to to complete is halt time in it, and i also can't say I am surprised."
Assessing indirect emissions "is a tough ask," he added.
Royal Bank of Canada analyst Robert Kwan said Energy East is probably immaterial within the market's valuation of TransCanada, although Thursday's announcement could "drive negative sentiment that may put some downward pressure over the shares."
Energy East's importance has somewhat diminished for TransCanada considering that the Country this holiday season approved the company's Keystone XL pipeline, that will run from Alberta to U.S. refineries.
The pipeline was up for its second NEB review, following first stalled in 2009 amid protests by environmentalists and after revelations that regulatory panel members met privately which includes a TransCanada consultant.