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TransCanada Mainline Gas-to-Oil Conversion Plans Advance

Supertanker oil cargoes will refill vacant natural gas capacity in TransCanada Corp.'s Mainline as early as the autumn of 2017, according to a two-volume blueprint for the Energy East conversion project released Tuesday.

TransCanada started federal and provincial regulatory processes rolling on the scheme by filing a formal project description with the National Energy Board (NEB) as the official doorway into an array of review agencies.

For a forecast C$12 billion ($10.8 billion), Energy East promises to deliver an initial 1.1 million b/d through 4,500 kilometers (2,700 miles) of pipeline from central Alberta to docks at Montreal, Quebec City and Saint John, New Brunswick. About 70% of the pipe is already in the ground as TransCanada's gas Mainline and only needs to be converted to oil service, said the project description.

New pipe would be required across eastern Quebec and New Brunswick. Except in eastern Ontario and western Quebec, where the TransCanada network runs full of short hauls of growing shale gas exports from the United States, the conversion would use excess capacity by converting one of six pipelines in the Mainline right-of-way.

A second project description is to be filed within a month for a 370-kilometer (333-mile) gas conduit across southern and eastern Ontario that would maintain current service and make capacity additions possible, TransCanada promised. Costs and other aspects of the proposed eastern gas line were not disclosed.

Known as Kings North, the project grew out of a settlement between TransCanada, Union Gas (Spectra), Enbridge Gas and Gaz Metro on coordinated construction of facilities chiefly for importing U.S. production from the Marcellus Shale.

The two-volume Energy East project description is short on commercial information and long on environmental and cultural matters ranging from effects on bird nesting areas to consultations with 155 aboriginal groups along the right-of-way.

Although pro-development federal and provincial political leaders have applauded Energy East as assurance that Canada would be self-sufficient in oil, the project description makes it plain that exports are a key ingredient of the scheme. Plans include jumbo connections of 42-inch diameter pipeline to docks along the Saint Lawrence Seaway through Quebec and at a refinery in Saint John.

The Energy East description said the loading facilities would be capable of filling Very Large Crude Carriers or VLCCs, the world's largest ships, carrying up to 2 million bbl (320,000 metric tons) of oil in hulls 300 meters (980 feet) long and 58 meters (63 feet) wide.

The project schedule calls for completing the Mainline conversion and starting oil service on the former gas pipe as far as Montreal and Quebec City by late 2017. The ambitious program sets a target of the fall of 2018 for finishing the full route to the Atlantic coast of New Brunswick.

Only about one-third of potentially opposed aboriginal groups along the right-of-way has agreed at least to consider cooperating with the Energy East project. Eco-protest campaigns are already running. A website, notranscanadapipeline.com, is calling the new plan one more attempt to accelerate "dirty oil" projects in the Alberta bitumen belt by expanding Canadian exports beyond traditional U.S. outlets.

The Canadian pipeline industry is on a growth roll, at least on paper, with three jumbo oil projects now in regulatory proceedings and a trio of gas proposals also in early stages of the fray.

While Energy East is aimed at filling Atlantic tankers, Enbridge Northern Gateway in December obtained approval for an oilsands export route to Kitimat on the northern Pacific coast of British Columbia (BC) and Kinder Morgan Canada's Trans Mountain Pipeline has filed a parallel application to send Alberta crude production overseas via Vancouver.

Also in BC, TransCanada and Westcoast Energy (Spectra) are advancing proposals for three jumbo pipelines, each capable of carrying up to 4 Bcf/d to fill 10 proposed liquefied natural gas (LNG) terminals.

In addition, Enbridge Inc. revealed a C$7 billion ($6.3 billion) pipeline to replace its 46-year-old Canadian oil mainline between central Alberta and the start of its U.S. routes in northern Wisconsin, at Superior on the western tip of Lake Superior. Rather than increase capacity, Enbridge said the scheme is intended to improve reliability, enhance service flexibility and replace obsolete hardware on an oil freeway that carries 2.2 million b/d.

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