CALGARY, Alberta (Reuters) - TransCanada Corp (TRP.TO), which earlier reported a 34 percent jump in second-quarter profit on Friday, said it expects its proposed Energy East pipeline will receive sufficient support from potential shippers to allow construction to proceed.
The company, which is also backing the controversial Keystone XL project, said the planned 700,000-barrel-per-day project, even as it awaits results from a open season process, where shippers sign long-term contracts for space on the line. Those results are expected within two weeks.
But TransCanada Chief Executive Russ Girling said he is confident the project, which will take Alberta crude to the Atlantic seaboard, is expected to go ahead, will garner enough support to allow construction to proceed.
“We continue to feel very positive about this initiative and we have received significant interest from both producers and refiners,” Girling said on a conference call.
The line, which could deliver crude to refineries near Montreal, Quebec City and Saint John, New Brunswick, would be the first export line to Canada’s East Coast. It would supplant imported crude that eastern refineries currently rely on and offer additional pipeline capacity for rapidly expanding oil sands production.
TransCanada’s Keystone XL line, which faces fierce opposition from environmental groups, could carry more than 800,000 bpd from Alberta to refineries on the Gulf of Mexico coast, is also being touted as a relief for Canadian oil producers worried about tight pipeline capacity.
However, the project is stalled as TransCanada waits for a final decision from the Obama administration as to whether it can proceed. That is expected later this year, five years after the company’s initial application for a presidential permit.
The company is nearing completion of Keystone XL’s southern leg, running from the oil storage hub of Cushing, Oklahoma to refineries on Texas’ gulf coast. TransCanada said the 700,000 bpd line is 85 percent complete and expected to be in service by the end of the year.
The company said net income attributable to common shares rose to C$365 million ($355.1 million), or 52 Canadian cents per share, from C$272 million, or 39 Canadian cents per share, a year earlier, as its electricity division benefited from higher power prices
Comparable earnings, which exclude most one-time items, jumped 19 percent to C$357 million, or 51 Canadian cents per share.
The company’s shares were up 11 Canadian cents to C$46.52 by late afternoon on the Toronto Stock Exchange.
($1 = 1.0280 Canadian dollars)
Reporting by Scott Haggett and Bhaswati Mukhopadhyay; editing by G Crosse and Nick Zieminski