TransCanada has abandoned the development of the proposed Energy East Pipeline and Eastern Mainline projects in Canada in the wake of environmental concerns and regulatory assessment.
The decision follows the company’s request to the National Energy Board (NEB) last month, asking the regulator to suspend the applications related to the projects for a period of 30 days.
The company noted that the time will allow it to carry out a review of recent changes by the NEB on issues and environmental assessment factors related to the projects.
In August this year, the NEB expanded the scope of the assessment regarding the projects to determine the risks associated with potential accidents and system malfunctions that might result in oil spills.
TransCanada president and CEO Russ Girling said: “We will continue to focus on our $24bn near-term capital programme, 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 eight to 10% range through 2020.”
The NEB also announced plans to look into upstream and downstream greenhouse gas emissions (GHGs) to understand the impact of the project on the communities.
In light of the termination of the projects, the company noted that it is reviewing around $1.3bn carrying value of its investments, including funding during construction.
The company expects to record an estimated $1bn after-tax non-cash charge in its fourth quarter results.
Spanning 4,500km, the Energy East pipeline was expected to carry 1.1 million barrels of crude oil per day from Alberta and Saskatchewan to refineries in Eastern Canada and a marine terminal in New Brunswick.
The Eastern Mainline Pipeline project was planned to extend from Markham to Brouseville in Ontario.
It comprised a proposal to build around 279km of gas pipeline and associated components.