"Crude oil pipeline capacity out of the Western Canada Sedimentary Basin is already tight and as production volumes increase, that capacity will become increasingly constrained," said Hal Kvisle, TransCanada's chief executive officer. "The Keystone Pipeline is the critical infrastructure shippers need to access key markets. We have secured firm, long-term commitments from shippers to transport 340,000 barrels of crude oil per day for an average term of 18 years."
The Keystone Pipeline is a proposal to build a 2,965-kilometer (1,842-mile) pipeline that will have a nominal capacity to transport approximately 435,000 barrels per day of crude oil from Hardisty, Alberta, to U.S. Midwest markets at Wood River and Patoka, Illinois. The pipeline can be expanded to a nominal capacity of 591,000 barrels per day with additional pump stations.
This application, filed by TransCanada's wholly owned subsidiary TransCanada Keystone Pipeline GP Ltd. (Keystone), is the second of two major regulatory applications to the NEB for the Canadian leg of the Keystone Pipeline. In the application, Keystone seeks approval to construct and operate new facilities in Canada including approximately 371 kilometers of new oil pipeline, terminal facilities at Hardisty, Alberta, and pump stations. Keystone is also seeking approval of tolls and the tariff for the pipeline. The estimated capital cost of the Canadian portion of the project is approximately CDN$664 million.
In June 2006, TransCanada and Keystone filed an application with the NEB seeking approval to transfer a portion of its Canadian Mainline natural gas transmission facilities to Keystone for use as part of the Keystone Pipeline. Public hearings on the transfer application were completed in mid-November and TransCanada anticipates a decision on its transfer application from the NEB in early 2007.
The Keystone Pipeline will also require approvals from a variety of U.S. agencies at the state and local levels. The U.S. portion of the project includes approximately 1,730 kilometers (1,075 miles) of new pipeline construction.
Public and stakeholder consultation, detailed environmental assessments and field studies, and further engineering work are ongoing in both Canada and the U.S. and will continue into 2007. Construction is expected to begin in early 2008, with commercial operations scheduled to commence in the fourth quarter of 2009.
To view a map of the proposed pipeline route and obtain other information about the Keystone Pipeline, please visit the project web page at www.transcanada.com/keystone.
TransCanada's network of more than 42,000 kilometers (26,000 miles) of pipeline transports the majority of Western Canada's natural gas production to key Canadian and U.S. markets.
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