TransCanada Corp. canceled its plans to build the Energy East and Eastern Mainline megaprojects, making its decision "after careful review of changed circumstances."
TransCanada had requested a 30-day regulatory timeout for the two projects as Canada's National Energy Board introduced a broader scope of issues and environmental assessment factors for the projects. The company on Oct. 5 announced it "will no longer be proceeding" with its applications. Energy East would have linked the oil sands region of Alberta with a seaport in New Brunswick.
Through a statement from President and CEO Russ Girling, TransCanada said it will notify the National Energy Board and Quebec's environmental regulators of the projects' withdrawal from environmental review.
"We will continue to focus on our [C]$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 eight to 10 percent range through 2020," Girling said.
TransCanada plans to review its carrying value of about C$1.3 billion, which included allowance for funds used during construction as a result of the projects' cancellation. The company also expects an after-tax, noncash charge of about C$1 billion to be reported in its fourth-quarter earnings results.
The 4,500-kilometer, C$15.7 billion Energy East pipeline would have delivered up to 1.1 million barrels of oil sands crude per day. The Eastern Mainline was planned as a 279-kilometer gas pipeline to be built in Ontario, which would have helped ensure steady supplies of gas after TransCanada converted other parts of the gas-carrying mainline to oil service for Energy East.