A $5-billion project to carry Alberta oil to eastern Canada is both technically and economically feasible, TransCanada Corp. has determined, clearing the path for the company to seek broader oil patch support for the project.

The eastern option, which would involve pumping oil through long stretches of already-built natural gas pipeline, has emerged amid the controversy stoked by proposals like Northern Gateway and the Trans Mountain expansion to carry oil west for export to California and Asia.

Now TransCanada says it could carry 500,000 to one million barrels per day east, where it could feed a 600,000 to 700,000 barrel-a-day refining market in central and eastern Canada, as well as refineries using another million-a-day on the U.S. eastern seaboard and, potentially, export markets in Europe and Asia.

“Discussions with potential shippers and other stakeholders are underway to determine if this is a project the market wants,” TransCanada chief executive officer Russ Girling said on a Tuesday morning earnings calls. “And based on early indications, we believe that it is.”

The preliminary $5-billion estimate would involve building some 375 kilometres of new pipe, and connecting it with 3,000 kilometres of existing gas pipe, to carry oil from the oil hub at Hardisty, Alta., to Montreal. A further 220 kilometres of new pipe, at a cost of several hundred million dollars, would be required to bring oil to Quebec City. Numerous new pumping stations would also be needed to press oil through a system designed for gas. TransCanada expects to formally solicit commercial support for the project early next year.

The pipeline would initially carry light oil, since eastern refineries are currently configured to use lighter blends sourced from places like the North Sea, offshore Africa and the Middle East. But the possibility of carrying heavy oil sands crude could spark shifts in Ontario, Quebec and New Brunswick refineries.

“Longer-term, there’s obviously the potential … to see some capital investment in those eastern refineries to allow them to run the heavier Alberta crudes,” said Alex Pourbaix, TransCanada’s president of energy and oil pipelines.

Some of that crude could come from PetroChina, the Chinese firm that said this week it will be a 50 per cent partner in the $3-billion Grand Rapids system to carry oil from its projects in the western oil sands to the Edmonton area. From there, it could ultimately flow into the eastern-destined pipeline. PetroChina expects to need 600,000 barrels per day of capacity on the pipe by the time it reaches full production between 2026 and 2030; that leaves a substantial empty space on the 900,000 barrel-a-day system, which would enter service in 2017, that could be filled by other producers.

Selling that space is a key priority, TransCanada said.

“Obviously, a big focus of the [business development] effort in the crude oil business over the next year is going to be to continue to add contracted volumes to our Grand Rapids project,” Mr. Pourbaix said.

TransCanada reported third-quarter comparable earnings of $369-million, or 52 cents a share, down from $386-million and 55 cents a share in 2011. It blamed problems in its power sector, as well as declining revenues from its natural gas pipelines, for the decline.

The company has gained contractual support for a further $7-billion in new projects this year, including the Grand Rapids system and another proposed pipeline to carry gas to the B.C. West Coast for export through a liquefied natural gas terminal being pursued by Royal Dutch Shell PLC and several Asian partners.

TransCanada’s power business usually attracts less attention than its pipelines, but the company said it had good news with its Bruce nuclear plant, the world’s largest, whose refurbished Unit 1 returned to service Oct. 22. Unit 2 is expected to recommence electricity generation in days.

TransCanada has also signed a memorandum of understanding with the Ontario Power Authority to build a $900-million gas-fired power plant at Ontario Power Generation’s Lennox site, near Bath, Ont. That plant will replace the plans, scuppered by the Ontario government, for a power plant in Oakville.

Meanwhile, TransCanada’s power plants in New England were able to continue making electricity through Hurricane Sandy, Mr. Pourbaix said.

“All of our large units were operating. The hydro dams were generating power and even our Kibby wind farm in Maine actually produced more power than we expected, because it was pretty windy,” he said.