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TransCanada confident on Keystone XL shippers

28 Nov 2017 17:43 GMT
TransCanada confident on Keystone XL shippers

Houston, 28 November (Argus) — TransCanada expects to have sufficient binding commitments to advance its long-delayed 830,000 b/d Keystone XL crude pipeline, the company said today.

But the future of the project is still uncertain even after Nebraska regulators approved an alternative route through that state last week, amid legal challenges and questions about the state permit.

TransCanada still hasn't made a final investment decision (FID) on the $8bn project to move crude from Alberta's oil sands to the US, but chief executive Russ Girling told investors today he is encouraged by "broad interest" from shippers in a recent open season. Construction could start in 2018 and would take about two years to complete.

The company said that it is not considering a partner for Keystone XL, but did not rule out the possibility.

Keystone XL would move crude from western Canada to Steele City, Nebraska, which is already linked to Cushing, Oklahoma, and the southeast Texas coast. The Nebraska Public Service Commission last week approved an alternative route for the project, but not TransCanada's preferred route, adding a new layer of uncertainty.

Girling said today that the company continues to review the Nebraska decision and its impact on the cost and schedule of Keystone XL.

TransCanada has asked Nebraska regulators to review the order. The company said that its "procedural motion" is not an attempt to have the Nebraska Public Service Commission alter the approval, but instead is asking regulators to allow TransCanada to address questions that were raised in the order.

The "mainline alternative route" approved by the commission would cross more ranges of federally listed threatened and endangered species, areas with highly erodible soils and more acres because of the longer route, according to TransCanada's Keystone XL application to Nebraska. It would also go across more perennial streams, railroads and total road crossings.

The construction of Keystone XL would also lead to related projects moving forward, including an expansion of the Grand Rapids crude pipeline system in western Canada, TransCanada said today.

The company first proposed Keystone XL in 2008 but it was delayed repeatedly. The administration of previous US President Barack Obama in 2015 blocked Keystone XL after years of review, citing environmental concerns. The project was revived this year, receiving a cross-border permit from the administration of President Donald Trump in March.

Opposition against Keystone XL flared most strongly in Nebraska, where the company still did not have a route approved when it pulled its state application after Obama denied the border-crossing permit.