Pipeline company TransCanada said it made a decision to move ahead with its Energy East pipeline designed to carry 1.1 million barrels of oil per day from Alberta and Saskatchewan to refineries in Quebec and New Brunswick.
Canadian Natural Resources Minister Joe Oliver said the project would help offset the estimated 700,000 bpd imported from overseas markets to feed eastern refineries.
Ontario Energy Minister Bob Chiarelli said in an interview published Thursday by The Globe and Mail newspaper he wanted financial assurances from TransCanada.
"There is a lot of concern that the majority of the oil ... will be for export, and that Ontario will only be a conduit to facilitate oil from tar sands to go to foreign markets," he said.
The project involves converting part of a natural gas pipeline to handle oil deliveries. Chiarelli said the federal government would weigh the loss of natural gas service in Ontario when it reviews the project.
Oliver told a Chamber of Commerce in Ontario last week "our oil will be stranded" without more infrastructure in place for transportation.