UPDATE 3-TransCanada to build only one Energy East oil export terminal

(Adds comments from Canadian Natural executive and Quebec
Premier Philippe Couillard)
By Nia Williams
CALGARY, Alberta, Nov 5 (Reuters) - TransCanada Corp
TRP.TO said on Thursday it has scrapped plans to build a port
in Quebec and will have only one crude oil export terminal for
its proposed Energy East pipeline, a possible setback for the
controversial project.
The move comes days after TransCanada asked the U.S. State
Department to pause its review of the company's long-delayed
Keystone XL pipeline, a request that Washington turned down amid
speculation President Barack Obama will ultimately reject the
pipeline. urn:newsml:reuters.com:*:nL1N12Z382
Like Keystone, Energy East is opposed by environmentalists
who want to stop expansion of the oil sands industry. The 1.1
million-barrel-per-day project is intended to carry crude from
Alberta across Canada to New Brunswick, where it could be
shipped abroad.
Calgary-based TransCanada had originally planned to build
two ports for shipping crude overseas by tanker - one at the
pipeline terminus in Saint John, New Brunswick, and the other in
Cacouna, Quebec.
However, the company abandoned the Cacouna location in April
after environmentalists raised concerns about the impact on
beluga whales in the St. Lawrence River. urn:newsml:reuters.com:*:nL3N0WZ3V3 It had
been looking at the feasibility of other Quebec locations.
Quebec Premier Philippe Couillard said the absence of a
Quebec terminal made it harder to calculate the economic
benefits, one of its criteria for supporting the pipeline. But
his spokesman later noted the province has not decided on the
project because it has not seen the final proposal.
CIBC World Markets analyst Paul Lechem said scrapping the
second export terminal did not affect the financial viability of
Energy East as Saint John had always been intended as the
primary port.
TransCanada said it had reached the decision after listening
to local communities, stakeholders and customers, and it will be
amending the Energy East project application before the National
Energy Board.
Canadian Natural Resources Ltd CNQ.TO Chief Executive
Steve Laut, whose company would be a customer of the pipeline,
said he accepted the decision but would have preferred to have a
Quebec export terminal since it would create more options and
Quebec jobs.
"But you have to put the environment first and it just makes
sense to go to Saint John," Laut said. "Overall we are okay with
it."
If approved, Energy East would still supply crude oil to the
Suncor Energy SU.TO and Valero Energy VLO. refineries in
Quebec and is targeted to come into service in 2020.
TransCanada shares were last down 0.6 percent at C$44.82 in
Toronto.