TransCanada to move forward with Keystone XL Pipeline

Ebony Scott
January 19, 2018

Company officials in Calgary, Canada, said in a release that the company has secured enough long-term commitments from oil companies to move forward.

The company said it has secured 500,000 barrels a day of 20-year commitments for the project after concluding an open season, locking up about 60 per cent of the 830,000 barrels of planned capacity.

"Over the last 12 months, the Keystone XL project has achieved several milestones that move us significantly closer to constructing this critical energy infrastructure for North America", Russ Girling, TransCanada's chief executive officer, said in the statement.

"Given the uncertainties related to the regulatory process and cost, we do not include the project in our model or valuation".

Alberta had previously committed to ship crude on TransCanada's canceled Energy East project, which would have transported 1.1 million bpd to the Atlantic Coast.

TransCanada said it is reaching out in the communities where the pipeline will be built and working with landowners to obtain the necessary easements for the approved route.

On November 20, 2017, the Nebraska Public Service Commission gave its approval for the pipeline route through the state, even though the route receiving approval was not the one TransCanada wanted.

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Opposed landowners, represented by Omaha lawyer David Domina, filed an appeal of the approvals at the end of December, bringing a potential commissioning and in-service date for the line into question.

The statement didn't say that a final decision has been made by the company to proceed and Terry Cunha, a spokesperson for TransCanada, didn't immediately respond to a request for comment.

Toronto-listed shares of the company were last trading flat at C$59.84.

The Alberta government committed 50,000 barrels a day for the project from some of the royalty payments it accepts as barrels of oil, as a way to help the project and to help industry receive a better price for its oil by avoiding the use of rail, said Notley.

Notley said the government committed barrels to the project to "maximize the return we get for every barrel of oil" because current Canadian oil production is outstripping total oil export capacity.

University of Calgary economics professor Trevor Tombe said there's "every reason to think" that committing government barrels to the pipeline makes good business sense.

Other reports by GizPress

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