By Nia Williams

CALGARY, Alberta, Nov 5 (Reuters) – TransCanada Corp mentioned on Thursday it has scrapped plans to construct a port in Quebec and could have just one crude oil export terminal for its proposed Energy East pipeline, a potential setback for the controversial challenge.

The transfer comes days after TransCanada requested the U.S. State Department to pause its overview of the corporate’s long-delayed Keystone XL pipeline, a request that Washington turned down amid hypothesis President Barack Obama will in the end reject the pipeline.

Like Keystone, Energy East is opposed by environmentalists who wish to cease enlargement of the oil sands business. The 1.1 million-barrel-per-day challenge is meant to hold crude from Alberta throughout Canada to New Brunswick, the place it might be shipped overseas.

Calgary-based TransCanada had initially deliberate to construct two ports for transport crude abroad by tanker – one on the pipeline terminus in Saint John, New Brunswick, and the opposite in Cacouna, Quebec.

However, the corporate deserted the Cacouna location in April after environmentalists raised considerations in regards to the influence on beluga whales within the St. Lawrence River. It had been trying on the feasibility of different Quebec places.

Quebec Premier Philippe Couillard mentioned the absence of a Quebec terminal made it tougher to calculate the financial advantages, certainly one of its standards for supporting the pipeline. But his spokesman later famous the province has not selected the challenge as a result of it has not seen the ultimate proposal.

CIBC World Markets analyst Paul Lechem mentioned scrapping the second export terminal didn’t have an effect on the monetary viability of Energy East as Saint John had all the time been supposed as the first port.

TransCanada mentioned it had reached the choice after listening to native communities, stakeholders and prospects, and it is going to be amending the Energy East challenge software earlier than the National Energy Board.

Canadian Natural Resources Ltd Chief Executive Steve Laut, whose firm could be a buyer of the pipeline, mentioned he accepted the choice however would have most popular to have a Quebec export terminal since it might create extra choices and Quebec jobs.

“But you have to put the environment first and it just makes sense to go to Saint John,” Laut mentioned. “Overall we are okay with it.”

If permitted, Energy East would nonetheless provide crude oil to the Suncor Energy and Valero Energy refineries in Quebec and is focused to come back into service in 2020.

TransCanada shares have been final down 0.6 % at C$44.82 in Toronto. (Additional reporting by Kevin Dougherty in Quebec City and Mike De Souza in Calgary; Editing by Jeffrey Benkoe, Frances Kerry and Marguerita Choy)

(c) Copyright Thomson Reuters 2015.

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