TransCanada profit falls; eyes new oil pipeline
By Jeffrey Jones
CALGARY, Alberta (Reuters) - TransCanada Corp reported a 14 percent drop in quarterly profit on Friday as the natural gas-transport segment of the country's biggest pipeline company was hurt by the depressed state of North America's gas industry.
Chief Executive Russ Girling said the company is looking at several regulatory and operational measures to deal with pressures on its Canadian gas mainline after an unusually warm winter slashed demand for the fuel, cutting volume on the system to less than half its roughly 6 billion cubic foot a day capacity.
The measures include studying the possibility of taking one of the pipelines on the 14,101 km (8,762 mile) system and changing it into an oil pipeline to transport crude to refineries in Eastern Canada, which now pay a premium for imported crude, Girling said.
TransCanada, which decided recently to chop its Canada-Texas Keystone XL oil pipeline into two pieces to get the controversial project started, made the switch to oil from gas for the Canadian portion of the initial Keystone line, which started up in 2010.
"Early days, but the refineries that import crude oil today in Canada are the refiners that are inquiring," he told reporters after the company's annual meeting. "I'm not sure you could touch them all with a new-build pipeline, but certainly there's nothing excluded from the analysis at the current time."
He said the company does not have a timetable or even a potential size for a new oil route to Eastern Canada, saying different pipe diameters would mean flow rates of as low as 300,000 barrels a day or as high as 800,000.
"It's way too early to talk about timing," Girling said. "Obviously there's technical feasibility, there's regulatory process, there's right-of-way, there's a whole host of things that are way too early for me to predict."
TransCanada's rival, Enbridge Inc, is also trying to advance plans to get Western Canadian crude to refineries in the East, by reversing the flow of a pipeline between Montreal and Sarnia, Ontario. It has met with resistance from environmental groups. Continued...