Crude Summit: TC Energy pivots after KXL cancellation

TC Energy is pivoting to find new ways to utilize its North American crude pipeline network after shelving plans to build the cross-border Keystone XL pipeline, including new ways to utilize its MarketLink system from Cushing, Oklahoma, to the US Gulf coast.

Calgary-based TC Energy, previously known as TransCanada, cancelled Keystone XL in 2021 after years of regulatory and legal delays. The company had previously suspended construction on the $8bn line after President Joe Biden rescinded a cross-border permit within hours of taking office in January 2021.

"It was very disappointing to say the least," said Bevin Wirzba, president of liquids pipelines at TC Energy, speaking at the Argus Americas Crude Summit in Houston, Texas, today. "We still believe in the merits for modern world-class North American infrastructure like Keystone XL."

Though it is still possible to boost pipeline capacity with strategic increases to existing assets, "The days of developers proposing multi-jurisdictional mega-projects may be behind us," Wirzba said.

The proposed 830,000 b/d Keystone XL pipeline would have moved crude from Hardisty, Alberta, to Steele City, Nebraska, where it would have connected with other pipelines to Cushing, Oklahoma, and the southeast Texas coast.

TC Energy had been reserving long-term capacity on its 800,000 b/d MarketLink crude pipeline from Cushing to Houston and Port Arthur in Texas in anticipation of offering combined service on Keystone XL from western Canada to the US Gulf coast.

In light of the Keystone XL cancellation, "We have pivoted our strategy and are open for new business opportunities" on MarketLink, Wirzba said.

TC Energy is also boosting pipeline connectivity and storage in the Houston region, where it sees a rising potential for rising heavy Canadian crude demand at area refineries and export facilities, he said.

TC Energy has seen record throughputs in recent months on its existing Keystone pipeline system that runs from Hardisty to Nebraska, where it splits to carry crude to Wood River and Patoka, Illinois.

The recent reversal of the Capline crude pipeline to St James, Louisiana, from Patoka could boost trading liquidity at the Patoka hub in coming months, Wirzba said.

By Chris Baltimore