Keystone XL pipeline steel may be sold off: Update
Adds details on pipeline construction
TC Energy is assessing options on its stalled 830,000 b/d Keystone XL crude pipeline, including selling the steel purchased for the project after President Joe Biden rescinded a key cross-border permit last month.
The company has not officially cancelled Keystone XL but has suspended the project while it assesses options with partners and stakeholders, including the government of Alberta, Canada, which invested $1.1bn in the pipeline last year.
The Keystone XL project team is evaluating what it can do with all of its equipment, including steel purchased for the line, the company said today.
Some of the steel has increased in value and there is a market for some of the spare materials if it gets to that point, TC Energy said.
The company installed about 90 miles (145km) of Keystone XL pipe in Canada in 2020 but none in the US except for a 1.2-mile border crossing.
The company expects to record "a substantive, predominantly non-cash, after-tax charge" to its earnings in the first quarter of 2021 related to Keystone XL. The amount of the impairment will depend on various issues, including "outstanding contractual commitments, the estimated net recoverable value of tangible plant and equipment and specified contractual recoveries."
TC Energy earlier this month cancelled an open season for its existing 590,000 b/d Keystone crude pipeline system which was contingent on Keystone XL going into service.
The $8bn Keystone XL pipeline began some construction activities in the US last year and was not expected to be placed into service until 2023.
TC Energy proposed the project more than a decade ago to offer another option to move western Canadian crude to the US. The line would move crude from Hardisty, Alberta, to Steele City, Nebraska, where it would connect with other TC Energy pipelines to Cushing, Oklahoma, and the southeast Texas coast.
The project was first proposed in 2008, but it has been delayed repeatedly. Former US president Barack Obama in 2015 blocked Keystone XL after years of review, citing environmental concerns. The project was revived in 2017, with a cross-border permit from former president Donald Trump's administration.
The project was delayed again last year when a US district court vacated a key water permit. That case is pending but may be moot if TC Energy cancels the project.
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Japan’s Nippon Steel halts output at Kimitsu plant
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