TransCanada Corp. is slowing work on two pipelines in Alberta because of reduced demand tied to lower crude prices and setbacks to its major oil export projects.

TransCanada is indefinitely bumping back construction that was planned for earlier this year on its Heartland line from Edmonton to Hardisty since the Keystone XL and Energy East systems it would supply are delayed, executives said Friday on a conference call.

Full expansion of the company’s Grand Rapids line from Fort McMurray to Edmonton, now under construction with startup planned for 2016, is being slowed as production rises more slowly in the oil sands.

“A lot of the commercial underpinning for Heartland is tied to Energy East and Keystone XL,” said Paul Miller, president of liquids pipelines at TransCanada. “We do anticipate a slowing growth of throughput and build-out of the Grand Rapids system to align with the slowing pace of oil production that we’re seeing in Alberta.”

Pipeline delays have curbed TransCanada’s growth prospects, including for its dividend, and contributed to the company restructuring its major projects division in June, cutting 185 jobs. TransCanada plans to build C$34 billion ($26 billion) of large-scale oil and natural gas conduits as it seeks higher revenue contributions from its pipeline businesses.

TransCanada has pushed back its startup target for the Energy East line to Canada’s Atlantic Coast to 2020 as it works to redesign the project to address opposition in Quebec. The line will cost more than its C$12 billion original estimate, the company said Friday.

Keystone Review

TransCanada’s $8 billion Keystone XL line that would transport oil-sands crude across the U.S. border to Gulf Coast refineries has been under review by President Barack Obama for almost seven years. Keystone will probably be rejected by Obama next month, Republican Senator John Hoeven said this week, citing unidentified sources. Spokesmen for the White House have declined to comment on Hoeven’s prediction.

Oil-sands developers are shelving or scrapping major projects, with the U.S. benchmark trading at less than half its 2014 high. Canadian oil output growth is forecast to rise 17% less by 2030 than previously expected, according to a June forecast by the Canadian Association of Petroleum Producers.

Source: www.worldoil.com

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