UPDATE 2-TransCanada's Eastern oil plan gathers steam

Tue Feb 12, 2013 6:23pm EST
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* West-East pipeline could start up in 2017

* Keystone XL approval now seen in first half

* Comparable earnings fall 13 pct to C$318 mln

* Raises quarterly dividend by 5 percent

By Jeffrey Jones

CALGARY, Alberta, Feb 12 (Reuters) - TransCanada Corp's plan to ship Alberta oil to Eastern Canada through a converted natural gas pipeline is quickly gaining traction, executives said on Tuesday, as the company's wait for a U.S. decision on its long-delayed Keystone XL project drags on.

TransCanada, which reported a 19 percent drop in fourth-quarter profit, expects to file an application by the end of this year for its mainline conversion project, which could allow up to one million barrels a day of oil sands-derived crude to flow to Quebec and the Atlantic provinces by 2017.

Last week, the premiers of Alberta and New Brunswick made an enthusiastic show of support for the made-in-Canada concept, partly as a way to avoid the cross-border regulatory delays that have engulfed the $5.3 billion Keystone XL project.

Chief Executive Russ Girling said TransCanada will hold an open season, or call for commercial support, for the as-yet unnamed West-East project shortly, and stressed he expects a "very favorable response" from oil producers and refiners.   Continued...