UPDATE 2-TransCanada agrees to Quebec environmental review for pipeline

Fri Apr 22, 2016 5:40pm EDT
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(Adds analyst comment)

By Nia Williams

CALGARY, Alberta, April 22 (Reuters) - TransCanada Corp agreed to submit to a Quebec environmental review of its Energy East pipeline on Friday, avoiding a potential legal battle with the province by putting the controversial project through an extra round of scrutiny.

The resolution removes a potential hurdle but also introduces another approval process for the nearly 2,860-mile (4,600 km) cross-Canadian pipeline, which will carry 1.1 million barrels per day of crude from Alberta's oil sands to the country's Atlantic coast.

TransCanada is pushing to build Energy East after U.S. President Barack Obama last year blocked the cross-border Keystone XL crude pipeline. His decision was a victory for environmentalists and a blow to TransCanada after a seven-year battle for approval.

In a statement, Quebec Environment Minister David Heurtel said TransCanada had filed a project notice agreeing to an environmental impact study, prompting the province to suspend its efforts to get a permanent injunction against the company.

Quebec will completely withdraw its injunction application once the study is approved, the minister said.

TransCanada spokesman Tim Duboyce said the company had initially been "quite perplexed" by Quebec's request in early March to submit to provincial environmental law because Energy East is subject to federal regulations.

"We will provide the environmental impact assessment in the form they are looking for in addition to a comprehensive one that has already been filed with the federal regulator the National Energy Board," Duboyce said.   Continued...