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TransCanada Terminates Energy East Pipeline Project


TransCanada Corp. (TRP, TRP.TO) said Thursday that it will no longer proceed with its proposed Energy East Pipeline and Eastern Mainline projects "after careful review of changed circumstances."

TransCanada President and Chief Executive Officer Russ Girling said in a statement that the company will inform the National Energy Board of its decision. It will also notify Quebec that it is withdrawing the Energy East project from the environmental review process.

TransCanada said last month that it would halt its efforts to get regulatory approvals for the controversial projects. Regulatory hurdles and heightened environmental scrutiny had raised doubts about the project's viability.

The Energy East pipeline project was seen by energy producers as a way to diversify into new markets by shipping oilsands production from landlocked Alberta to the U.S. Midwest and Gulf Coast.

The pipeline was planned to deliver 1.1 million barrels per day of western Canadian crude to refineries in Quebec and Saint John as well as to an export terminal in New Brunswick on Canada's Atlantic Coast.

TransCanada said it will now continue to focus on its 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 per cent range through 2020.

As a result of its decision not to proceed with the proposed projects, TransCanada is reviewing its approximate C$1.3 billion carrying value, including allowance for funds used during construction or AFUDC capitalized since inception.

The company expects to record an estimated C$1 billion after-tax non-cash charge in its fourth-quarter results.

TransCanada stopped capitalizing AFUDC on the project effective August 23, 2017, as disclosed on September 7, 2017. Due to the project's inability to reach a regulatory decision, the company does not expect any recoveries of costs from third parties.

TRP.TO closed Wednesday's trading at C$60.89, down C$0.34 or 0.56 percent on a volume of 1.32 million shares.

by RTTNews Staff Writer

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