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Today, Thursday, October 5th, TransCanada Corporation announced that it will no longer be proceeding with the Energy East Pipeline and Eastern Mainline projects.
The project had a price tag of $15.7 billion and would have provided Western Canadian customers access to Eastern Canadian refineries, and provide tidewater access to the U.S. Northeast, Gulf Coast, and growing international markets.
TransCanada’s announcement follows the NEB Energy East Panel’s decision to consider upstream and downstream greenhouse gas (GHG) emissions for the projects.
Alberta Premier Rachel Notley released a statement on the news of the canceled project, relaying the Alberta government's disappointment by the recent decision.
“The National Energy Board needs to send a clear message on what the future of project reviews look like in Canada. Our government understands that deliberation on upstream emissions and land-use integrity is important and must continue. Investors need confidence and we look forward to seeing that certainty in place soon," said Notley.
“This decision highlights the importance of diversifying market access and the subsequent national priority that must be placed on the Trans Mountain expansion project.”
As a result of TransCanada’s decision not to proceed with the proposed projects, they are reviewing its $1.3 billion carrying value, including allowance for funds used during construction ( AFUDC) capitalized since inception, and expects an estimated $1 billion after-tax non-cash charge will be recorded in the company's fourth-quarter results.
The CEPA issued a statement on their disappointment in the loss of the project.
“TransCanada was forced to make the difficult decision to abandon its project, following years of hard work and millions of dollars in investment,” they said.
“The loss of this major project means the loss of thousands of jobs and billions of dollars for Canada, and will significantly impact our country’s ability to access markets for our oil and gas.
TransCanada stopped capitalizing AFUDC on the project effective August 23rd, as disclosed on September 7th of this year.
In light of the project’s inability to reach a regulatory decision, no recoveries of costs from third parties are expected.
TransCanada operates one of the largest natural gas transmission networks that extends more than 91,500 kilometres, tapping into virtually all major gas supply basins in North America.
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