12:23 PM, Oct 5, 2017 — Pipeline operator TransCanada (TRP) will take C$1 billion ($790 million) charge in the fourth quarter after terminating plans for two pipelines in eastern Canada.
The Canadian company said in a release it will end the planned Energy East and Eastern Mainline projects after a careful review of what it termed changed circumstances. Further details weren’t given.
“In light of the project’s inability to reach a regulatory decision, no recoveries of costs from third parties are expected,” the company said.
TransCanada said it stopped capitalizing the project in August. In September, the National Energy Board, Canada’s industry regulator, said it suspended its review of the projects for 30 days at the company’s request. Earlier, the board said it received 820 submissions as part of public comment period into the pipelines and would consider factors including greenhouse gas emissions and potential accidents and spills.
The company added they will focus on their $24 billion near-term capital program which is expected to generate growth in earnings and cash flow to support an expected annual dividend growth rate at the upper end of an 8% to 10% range through 2020.
Energy East was a proposed 4,500 kilometers (2,800 miles) of pipeline that would transport 1.1 million barrels of oil a day from Alberta and Saskatchewan to the refineries of eastern Canada
The Eastern Mainline project was to be 279 kilometers of new natural gas pipeline facilities that would have been integrated into the Canadian Mainline system upon completion. The project was also to have added nine compression units at five existing sites.
Companies: TransCanada Corporation
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