Skip to main content

From left: Paul Browning and Arthur Irving, CEO and chairman, respectively, of Irving Oil; and Stefan Pohlod, president for the eastern energy pipeline; gather at the refinery in Saint John after the announcement of a proposed pipeline and marine terminal.

For the Globe and Mail/David Smith

TransCanada Corp. and Irving Oil Ltd. are joining forces to market Canada's crude oil to the world, officially launching the proposed $12-billion Energy East pipeline and a $300-million deep-water marine terminal to be built off Saint John, N.B.

The Energy East pipeline, subject to regulatory approval, promises to unlock new markets for landlocked Western Canadian suppliers by giving them access to eastern refineries and global export markets through ports at Quebec City and Saint John.

TransCanada chief executive Russ Girling said the company expanded its original plan to 1.1-million barrels per day of capacity – about a third of current Canadian oil production – after Irving Oil successfully promoted the ambitious export option to energy producers.

Story continues below advertisement

Echoing politicians backing the plan, Mr. Girling described Energy East – the largest project ever undertaken by TransCanada – in nation-building terms, comparing it to the construction of the Canadian Pacific Railway or the Trans-Canada Highway.

"Each of these enterprises required innovative thinking and a strong belief that building critical infrastructure ties our country together, making it stronger and more in control of our own destiny, and this is true of Energy East," he said.

For the family-owned Irving company, the pipeline represents a critical new source of oil for its refinery.

"Canada has the world's third-largest basin of oil reserves, and it's the only major basin of oil reserves in the world that's not connected to a major deep-water port," Irving Oil president Paul Browning said in a telephone interview from Saint John. "And so we do feel that when this pipeline and marine terminal is put in place and Western Canadian crude has access to a deep-water port, there is going to be a substantial opportunity for us and our partner."

The oil terminal will be built at the Irving-owned Canaport facility, which now imports liquefied natural gas but is to be converted to handle LNG storage and exports. Mr. Browning said TransCanada and Irving have been talking to potential buyers of Canadian crude as far away as Asia and are confident there will be demand for the exports.

But first, TransCanada has to get regulatory approval, consult with scores of First Nations communities along the route and win over a public whose fears will be stoked by environmental groups eager to choke off oil sands expansion by blocking pipelines and producers' access to markets.

The company hopes to complete construction to Quebec City by late 2017 and to Saint John in 2018.

Story continues below advertisement

In a news conference Thursday, Mr. Girling said the company faces a long road in winning the necessary approvals and acknowledged that people in Quebec will be particularly sensitive to the risks involved in transporting crude after the calamitous derailment in Lac-Mégantic in which 47 people were killed.

"The impact on this review obviously is that public awareness has increased," Mr. Girling said. "These kinds of events should not occur, and as transporters, we have to do everything we possibly can to ensure they don't happen in the future."

Quebec Premier Pauline Marois has been non-committal on the contentious project, saying last week during a premiers' conference that her government was working with Alberta to identify benefits and risks. Her office refused to comment on Thursday's announcement.

But environmentalists are clearly gearing up for a battle, just as they have fought TransCanada's Keystone XL pipeline in the United States and Enbridge Inc.'s Northern Gateway project to bring oil-sands bitumen through British Columbia to an export terminal in Kitimat.

"You can't build a nation around a project that will poison water, violate treaty rights and further accelerate a global climate crisis that is already resulting in weather disasters around the world," said Greenpeace Canada campaigner Mike Hudema.

Western oil producers are welcoming the TransCanada plan, which would convert some 1,400-kilometres of under-utilized natural gas pipeline for oil use and build new pipe through Quebec, New Brunswick and parts of Alberta.

Story continues below advertisement

Cenovus Energy Inc. aims to boost production to half a million barrels per day by the end of 2021 and is looking at all options for marketing its crude. It has committed to send 200,000 barrels per day down the eastern line.

The project provides "access to a market that we're only currently reaching in small amounts by rail. … It's a very promising project for us," spokeswoman Rhona DelFrari said.

With files from Sophie Cousineau in Montreal and Carrie Tait in Calgary.

Editor's Note: An earlier online version of this article incorrectly referred to the president of Irving Oil as Paul Brown. This has been corrected.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter