TransCanada Corp. said Thursday it would end efforts to develop two Canadian energy pipeline projects after facing regulatory delays.
The pipeline operator had envisioned the Energy East and Eastern Mainline projects to help increase western Canadian oil producers' access to east-coast and offshore refineries and increase natural-gas supplies to Southern Ontario.
Continue Reading Below
But the company in recent years has dealt with a fall in the price of crude oil, which is now hovering around $50 a barrel, down from nearly $100 a barrel in mid-2014.
TransCanada Chief Executive Officer Russ Girling said the decisions come after "a careful review of changed circumstances," and in prepared remarks he thanked the labor and business groups and municipalities who provided support for the projects.
Opponents said the projects would increase greenhouse gas emissions by allowing oil-sands producers, the most greenhouse-gas intensive sources of crude, to ramp up production.
The 4,500-kilometer (roughly 2,800 miles) Energy East pipeline was planned to run from Alberta and Saskatchewan to the refineries of Eastern Canada and a marine terminal in New Brunswick, carrying about 1.1 million barrels of crude oil a day. The Eastern Mainline project included new natural gas pipeline and compression facilities largely along the company's existing systems in Southern Ontario.
Another pipeline, the Keystone XL project, which got approval from President Donald Trump in March has struggled to find interested oil producers and refiners. That pipeline, also owned by
TransCanada, is planning to ship crude from Canada to the U.S. Gulf Coast.
As a result of its decision to end the projects, TransCanada said it is reviewing the project's 1.3 billion Canadian dollar ($1.04 billion) carrying value and expects to record an estimated $1 billion impairment charge in its fourth quarter.
Write to Austen Hufford at firstname.lastname@example.org
(END) Dow Jones Newswires
October 05, 2017 09:13 ET (13:13 GMT)