“These confirmed, long-term contracts demonstrate the strong desire for eastern Canadian refineries to access growing supplies of domestic crude oil and for Canadian producers to potentially reach both domestic markets and international markets in the safest and most efficient means possible and that is in a pipeline,” Mr. Girling said.

With Energy East, TransCanada plans to convert portions of its mainline natural gas system to carry crude as far as Eastern Ontario, adding new pipe to get oil to refineries and tanker ports in Quebec and New Brunswick.

He said the pipeline could deliver light oil from western North America to refineries in Quebec and Saint John, N.B., for $10 (U.S.) a barrel less than it costs to ship it by rail. Deliveries to the U.S. Gulf Coast by Energy East and supertanker would be $6 a barrel less than the current costs of shipping Alberta by rail, and would be competitive with other pipelines, Mr. Girling said.

TransCanada expects roughly half of the volumes shipped along Energy East will be used at refineries in Quebec and New Brunswick, which currently import about 700,000 b/d of crude, though rising volumes come from the United States. The most attractive export markets will be the U.S. East Coast for light crude, and the U.S. Gulf Coast, Europe and even western India for diluted bitumen from the oil sands, the company said.

While the project has won support from premiers in Alberta and New Brunswick and from the Harper government in Ottawa, approval is no slam dunk.

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