TransCanada gives up on C$15.7b Energy East pipeline

CALGARY: TransCanada Corp abandoned its C$15.7 billion (RM53.02 billion) cross-country Energy East pipeline on Thursday amid mounting regulatory hurdles, dealing a blow to the country’s oil export ambitions.

The demise of the pipeline comes less than a year after the Canadian government rejected another export pipeline, Enbridge Inc’s Northern Gateway, and is a further setback for Canada’s oil industry already hurting from low global crude prices.

Concern about limited market access is one of the reasons foreign oil companies have sold off US$23 billion (RM97.39 billion) in Canadian assets this year, along with high production costs that have made the country’s oil sands unattractive.

“It means fewer options for Canada and Canadian producers to access global markets and to receive fair pricing for one of our country’s most important export products,” said Brett Harris, a spokesman for Canada’s No. 3 oil sands producer Cenovus Energy.

The cancellation heads off a row over the project for Prime Minister Justin Trudeau’s Liberal government, which is trying to balance diversifying Canada’s oil exports with a commitment to tackling climate change.

On Thursday, TransCanada cancelled the plan, citing its review of “changed circumstances” and said it would take a fourthquarter C$1 billion after-tax noncash charge. Reuters