OREANDA-NEWS.  TransCanada said it is close to a decision on an alternative design for its Energy East project in Canada, which could include a new crude marine terminal, and will submit an amended plan to regulators by the end of the year.

The 1.1mn b/d Energy East line would use a mix of natural gas line conversions and new construction to link western Canadian oil sands production to eastern refineries and the port at Saint John, New Brunswick, for export to the US or other countries.

TransCanada in April scrapped plans to build a marine terminal in Cacouna, Quebec, as part of Energy East because of a nearby whale habitat, delaying the pipeline project by two years to 2020.

"We continue to review potential alternative export terminal options with our shippers and other stakeholders," chief executive Russ Girling said on an earnings call. "We expect that we'll be in a position to offer further update on that shortly."

The C$12bn ($9.2bn) price tag for Energy East will likely rise because of route changes and higher building costs, the company said.

Energy East is a key project to provide an outlet for oil sands production, particularly given opposition to lines to the west coast and the planned 830,000 b/d Keystone XL cross-border line to the US Gulf coast.

TransCanada yesterday asked the US State Department to pause its review of Keystone XL while Nebraska officials review a new route through that state. The delay while the Nebraska Public Service Commission (PSC) reviews the pipeline route could take seven to 12 months, the company said.

"We believe that a pause to resolve the Nebraska route gives the best opportunity to achieve overall approval for the project," Girling said today.

Since Keystone XL would cross the US-Canadian border, the State Department has been evaluating whether construction of the pipeline would be in the US' national interest. Opposition from environmental groups on both sides of the border has made what would typically be a routine review into a seven-year process for the $8bn pipeline to transport crude from Canada's oil sands and the Bakken formation.

The Obama administration is widely expected to reject the pipeline project, but TransCanada officials today denied any political motives for the delay request, saying that it made sense to wait until Nebraska has concluded its process.

TransCanada's request to pause the review may not prevent the administration's expected rejection of the project. The State Department said today it will respond to TransCanada's request but did not provide a timeline. And the White House said the administration will make a decision on the project "even as we evaluate their request and consider the reasoning behind it." The White House called the request unusual, "given how long [the review process] has taken."

TransCanada also said today that two large natural gas pipeline projects in Mexico are on target to be operational next year. The $1bn Topolobampo project is 70pc complete and the connecting $400mn Mazatlan pipeline is more than 80pc complete. Both lines are in northwest Mexico and are designed to help fuel new gas-fired power generation.

TransCanada said it is pursuing additional pipeline projects in Mexico and is expecting a decision next week on one of the projects to be awarded by the Mexican state-owned utility CFE.

CFE will likely request proposals for six more projects by the end of the first quarter of 2016, Girling said.

"TransCanada is reviewing all those projects and we intend to participate in the ones that fit with our capabilities," he said.