TransCanada Axed Energy East to Fill Keystone XL, Trudeau Says

(Bloomberg) -- Canadian Prime Minister Justin Trudeau says a lack of demand to ship oil on Keyxtone XL contributed to TransCanada Corp.’s decision to abandon another major crude pipeline.

“The Energy East pipeline was a market decision made by a company that was having trouble filling the Keystone XL pipeline that had just been approved,” Trudeau told reporters Thursday in New Brunswick, the Atlantic province to which Energy East would have carried Alberta oil. “There was no business case anymore, according to the company, for the Energy East pipeline. You’ll have to remember that pipeline was approved at a time when oil prices were twice as high as they were now, or were a few months ago.”

TransCanada pulled the plug on Energy East, which had an estimated cost of C$15.7 billion ($12.2 billion), in October 2017. The Alberta government had made a pledge to support to Energy East -- by committing to use or pay for 100,000 barrels per day to be shipped. It has since made a 50,000-barrel pledge for Keystone XL.

The Calgary-based company announced in January it had “successfully concluded the Keystone XL open season,” with about 500,000 barrels per day of shipping commitments “positioning the proposed project to proceed.”

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