Canada-based pipeline company TransCanada has decided to move ahead with the 1.1 million barrel per day (bbl/d) Energy East pipeline project after a successful open season.

TransCanada’s decision is based on binding, long-term contracts received from producers and refiners.

The project is estimated to cost $12bn, excluding the value of Canadian Mainline pipeline system.

It will convert a portion of natural gas pipeline capacity in 3,000km of TransCanada’s existing Canadian Mainline to crude oil service and build 1,400km of new pipeline.

The pipeline will carry crude oil from Alberta and Saskatchewan to Saint John, New Brunswick, where TransCanada and Irving Oil have formed a joint venture (JV) to set up a new deepwater marine terminal.

Energy East will use a portion of Canadian Mainline capacity, while TransCanada aims to continue serving its gas customers in eastern Canada and the northeast US.

The company plans to apply for regulatory approvals to build and operate the pipeline project and terminal facilities in early 2014.

TransCanada president and CEO Russ Girling said, "Energy East is one solution for transporting crude oil but the industry also requires additional pipelines such as Keystone XL to transport growing supplies of Canadian and U.S. crude oil to existing North American markets."

"Both pipelines are required to meet the need for safe and reliable pipeline infrastructure and are underpinned with binding, long-term agreements," Girling added.