TransCanada says cuts are designed to move forward its $46-billion capital growth plan.
TransCanada Corporation (TSE:TRP, Mkt cap 38.29B, P/E 22.34, Div/yield 0.52/3.85, EPS 2.42, Shares 708.94M) has illustrated its cost-cutting efforts by laying off 185 people from its major projects departments, the Calgary Herald reports.
Downsizing of the workforce has become common practice among producers and oilfield services companies, with low oil and gas prices necessitating an efficiency drive.
However, the move marks the first large-scale layoff by a midstream company in Calgary – where the pipeline builder is based – this year.
TransCanada spokesman Mark Cooper confirmed the news in his response to an email inquiry by the Herald, adding that of the 185 workers laid off, approximately 100 were full-time employees.
“[The job cuts are] designed to ensure we move forward with our $46-billion capital growth plan in a way that meets the needs of our customers, while allowing TransCanada to remain competitive and deliver incremental value for our shareholders,” Cooper explained.
Analysts, meanwhile, believe the downsizing to be, in part, the result of a lull in its line of projects, pointing to its King’s North Connection gas pipeline project in southern Ontario, which was only green-lit by the National Energy Board last week and will not enter service until 2017.
TransCanada also continues to run into delays in its proposed $12-billion Energy East oil pipeline, forcing the firm to push back the pipeline’s start a further 12 months to 2020.
If it does eventually come into service, however, it will represent North America’s largest crude pipeline, spanning 4,600 kilometres from Alberta’s oilsands to New Brunswick, with the capacity to carry 1.1 million barrels of crude a day to foreign markets.
Cooper, however, says that the layoff cannot be attributed to any one project in particular. Instead, it is the result of a “significant restructuring” of its entire major projects department in the name of efficiency and effectiveness.
TransCanada is a Canadian energy infrastructure company. The Company operates 3 divisions: Natural Gas Pipelines, Liquids Pipelines and Energy.
Natural Gas Pipelines and Liquids Pipelines consist of natural gas and liquids pipelines in Canada, the United States and Mexico, plus regulated natural gas storage operations in the US.
TransCanada’s natural gas pipeline network ships natural gas to local distribution companies, power generation facilities and other businesses across Canada, the United States and Mexico.
The companies liquids pipeline infrastructure connects crude oil sources in Alberta and the United States to the US refining markets in Illinois, Oklahoma and Texas, as well as connecting the US crude oil supplies from the Cushing, Oklahoma hub to refining markets in the US Gulf Coast.
The Energy division holds TransCanada’s power operations and the non-regulated natural gas storage business in Canada.
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