New Brunswick

Saint John mayor to pitch west-east pipeline in Calgary

Saint John Mayor Mel Norton will travel to Calgary this week to add his voice to those supporting the proposed west-east pipeline.

Mel Norton says TransCanada's pipeline proposal cannot be taken for granted

Saint John Mayor Mel Norton will travel to Calgary this week to add his voice to those supporting the proposed west-east pipeline.

Norton plans to visit oil producers, business leaders and Calgary officials to discuss his support for TransCanada Corp.’s proposed pipeline that would ship oil from Alberta to Saint John.

Saint John Mayor Mel Norton will travel to Calgary this week to push for the west-east oil pipeline that is being proposed by TransCanada Corp. (CBC)

He said the Calgary trip is a city initiative but he will be accompanied by a representative from the Port of Saint John and will be joined in Alberta by Energy Minister Craig Leonard.

Norton said the Calgary-based company's pipeline proposal must be supported because it is important to Saint John.

"We have to be cautious not to think that this is a done deal. That's one of the reasons that we're going because we do not for a second want to take a pipeline coming to Saint John for granted." He said.

Norton said he also plans to visit Irving Oil Ltd.'s office in Calgary while in the western city.

In April, TransCanada announced it was seeking firm financial commitments from companies wanting to ship crude oil from Western Canada to refineries in Eastern Canada.

TransCanada said if the next phase is successful, it plans to start seeking regulatory approvals later in 2013 and the oil could start flowing to Eastern Canada by late 2017.

The proposal would be to convert 3,000 kilometres of the company's natural gas pipelines to allow for crude oil to be transported. The company would also be looking at building 1,400 kilometres of new pipeline from Quebec into Saint John.

The pipeline could carry between 500,000 and 850,000 barrels of crude oil per day from Alberta and Saskatchewan to the eastern refineries, according to the company.

Alward travelled to Calgary in February

Premier David Alward and Alberta Premier Alison Redford met in February to discuss the west-east pipeline. (CBC)

Norton’s trip to Calgary follows a similar initiative of Premier David Alward, who spent three days in Alberta in February talking to Alberta Premier Alison Redford and oil executives about the the west-east pipeline.

The New Brunswick government has estimated the proposed pipeline has the possibility of creating 2,000 jobs during the construction phase and a few hundred refining jobs after its completion.

New Brunswick would like the new pipeline as a way to add jobs in the oil and gas sector. Meanwhile, Alberta has expressed interest in the pipeline initiative because oil from that province is now being shipped to the United States, where there is a glut. That means oil producers are getting $20 to $40 less per barrel than the world price.

Those lower prices translate into lower royalties for the provincial government and that is causing a potential multi-billion dollar deficit in Alberta.

A pipeline to the Irving Oil Ltd. refinery would allow Alberta producers to charge the higher world price.