CALGARY (Reuters) - TransCanada Corp (TRP.TO) is pushing ahead to develop Energy East, an all-Canadian alternative pipeline project to its struggling U.S. Keystone XL pipeline, and will soon reveal the location of a new export terminal.
The Calgary-based company said on Tuesday it was “very close” to announcing an alternate location for the crude export terminal after canceling plans for a Quebec port due to environmental concerns.
TransCanada’s chief executive officer said the company was preparing to work with Canada’s new Liberal government on Energy East as it reviews the country’s regulatory regime.
The comments came a day after TransCanada asked the U.S. government to delay its decision on the controversial Keystone project, a move seen pre-empting a possible rejection by U.S. President Barack Obama.
The White House said on Tuesday it would be “unusual” to pause the U.S. government’s years-long review process of the pipeline. Spokesman Josh Earnest said the State Department was trying “to determine exactly what the request is, and what is motivating that request.”
CEO Russ Girling told a conference call the company was trying not to get involved in the politics of the Keystone XL review, but needed time to work through the Nebraska review.
“We’ve worked very hard for seven years to try to keep our head down and work our way through every twist and turn and every additional request through the regulatory process,” said Girling. “There are things that we can control, there are things we can’t control and obviously. We’re focused on those that we can.”
The nearly 1,200-mile (2,000-km) Keystone would carry 830,000 barrels a day of mostly Canadian oil sands crude to Nebraska en route to refineries and ports along the U.S. Gulf Coast.
A senior Liberal Party source told Reuters on Tuesday that Energy East could go ahead if it passes a robust environmental review.
The centrist Liberals, to be sworn in on Wednesday, had accused the outgoing Conservative government of weakening Canada’s environmental laws.
“I’ve been at this for 30 years and we’ve seen many changes in the regulatory process over that period of time,” said Girling. “There’s no question these things cost more money going forward. But at the end of the day, if the result is a safer, more reliable infrastructure, that makes sense for us.”
If approved, Energy East would carry up to 1.1 million barrels of crude oil per day from Alberta’s oil sands to the Atlantic coast, along a 4,200 km (2,850) route.
Earlier Tuesday, TransCanada reported a better-than-expected quarterly profit, helped by rising revenue and higher income from its existing Keystone systems.
Earnings before interest, taxes, depreciation and amortization from TransCanada’s Keystone pipeline system rose 32 percent to C$363 million ($275.90 million) in the third quarter, helped by higher uncontracted volumes and a stronger U.S. dollar.
TransCanada’s stock was up 2 cents to C$44.24 in afternoon trading.
Both Energy East and Keystone would give Alberta oil sands producers access to new markets. Oil sands have long been a target of environmentalists because of their carbon-intensive production process.
TransCanada, which has been cutting jobs, said it expected further restructuring in the fourth quarter and into 2016.
($1 = 1.3157 Canadian dollars)
With additional reporting by Euan Rocha in Toronto, Tim Gardner in Washington and Sneha Banerjee in Bengaluru; Editing by Maju Samuel, Ted Kerr and Jeffrey Benkoe