* Sees potential for East Coast pipeline
* Oil sands crude could replace foreign imports
* Could ship to Atlantic Basis refineries
* Shares rise 2.1 pct
CALGARY, Alberta, June 27 (Reuters) - The chief executive of TransCanada Corp, which is planning to build the controversial Keystone XL oil pipeline, said on Wednesday that a new line to carry oil sands crude to Canada's Atlantic coast could also serve markets in Europe and the U.S. Eastern Seaboard.
TransCanada, the country's largest pipeline operator, is mulling whether to build a line to move crude to refineries in Eastern Canada that currently rely on expensive foreign imports. It is considering converting an underused natural-gas line to oil service to take oil as far as Quebec and then build new pipe to the line's terminus. It is a model the company used with the first phase of its Keystone pipeline.
TransCanada and rivals Enbridge Inc and Kinder Morgan Energy Partners LP are all proposing new pipelines to carry surging production from the oil sands and the Bakken oil field to new markets.
Output from the oil sands is forecast to rise by 2 million bpd by 2021 to 3.7 million bpd. Meanwhile, oil from the Bakken and Three Forks shale in North Dakota, the most prolific tight oil prospect in the United States, is forecast to double from the current 545,000 bpd level over the next two decades.
"If you can get ultimately to New Brunswick and load large-sized vessels you can go to the Gulf Coast relatively economically and you can access Europe relatively economically," Russ Girling, TransCanada's chief executive, told investors at a Toronto conference sponsored by BMO Capital Markets. "I'd say there is a fair bit of market pull."
TransCanada's line could potentially serve Canadian refineries that process as much as 600,000 barrels per day of oil, including Canada's largest refinery, the 300,000 bpd Irving Oil Ltd facility in Saint John, New Brunswick. But the line could also profitably ship oil sands crude to Atlantic Basin refineries for the first time.
TransCanada cannot yet say when it will lay out details on the East Coast pipeline but Girling said the company believes that converting one of its under-used gas lines is technically and economically feasible.
Now it must figure out what tolls it will charge customers to ship on the line and whether there is sufficient demand for the project, though Girling believes that rising oil production will justify the line.
Producers "are going to need multiple outlets and this would be a very viable one," he said.
TransCanada shares were up 86 Canadian cents at C$42.12 by midday on the Toronto Stock Exchange.