November 20, 2014 / 4:23 PM / 3 years ago

Quebec imposes conditions on TransCanada's Energy East pipeline

A TransCanada Keystone Pipeline pump station operates outside Steele City, Nebraska March 10, 2014. REUTERS/Lane Hickenbottom

CALGARY Alberta (Reuters) - TransCanada Corp’s plans for a pipeline to ship Alberta oil to Canada’s East Coast face a new hurdle after Quebec said this week the project must meet seven conditions before it will be allowed to proceed through the province.

Quebec’s demands for the C$12 billion ($10.6 billion) project, known as Energy East, follow a failed vote in the U.S. Senate aimed at forcing presidential approval for another controversial TransCanada pipeline project, Keystone XL. That line would move crude from the Alberta oil sands to the U.S. Gulf Coast.

Quebec Environment Minister David Heurtel set out the conditions the Energy East pipeline must meet in a Nov. 18 letter to the company seen by Reuters. These include an environmental assessment that examines its impact on greenhouse gas emissions and an outline of the pipeline’s economic benefits for the province.

Under the seven conditions, the company will also be required to consult with local communities to “ensure the project’s social acceptability”, and comply with legislation on aboriginal consultation and participation.

Tim Duboyce, a spokesman for TransCanada, confirmed it had received a letter outlining Quebec’s demands but declined further comment.

A spokesman for federal Natural Resources Minister Greg Rickford was not immediately available for comment.

Energy East would take 1.1 million barrels per day of crude oil to refineries in Quebec and New Brunswick as well as to ports in both provinces for export. About 700 kilometers (434 miles) of the line’s 4,600-km route would run through Quebec.

Quebec’s demands are similar to five conditions set out by the province of British Columbia for approving Enbridge Inc’s Northern Gateway pipeline from Alberta to an export port on British Columbia’s North Pacific Coast. But unlike British Columbia, Quebec is not demanding a share of pipeline revenue.

Energy East already faces opposition from environmental groups worried about oil spills and the expansion of carbon-intensive production from the Alberta oil sands. Other jurisdictions, such as the province of Ontario, along its route are studying the impact of the project, but Quebec is the first to attach conditions to its approval. By law, final approval lies with the federal government.

TransCanada shares were up 0.26 percent at C$57.65 around midday on the Toronto Stock Exchange.

Reporting by Scott Haggett in Calgary, Julie Gordon in Vancouver and David Ljunggren in Ottawa; Editing by Jeffrey Hodgson; and Peter Galloway

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