TransCanada announced the National Energy Board (NEB) has approved the company's application to construct and operate the Canadian portion of the Keystone Gulf Coast Expansion Project. The NEB stated in its release that it found, "the proposed pipeline to be in the public interest and accepted that the project would connect a large, long term and strategic market for Western Canadian crude oil with the U.S. Gulf Coast in a manner that would bring economic and other benefits to Canadians."
"We are pleased the National Energy Board has approved our Keystone expansion. This is another significant milestone in advancing the project," said Hal Kvisle, TransCanada president and chief executive officer. "Keystone will be the first pipeline to directly connect a growing and reliable supply of Canadian crude oil to the largest refining market in North America. Our shippers have committed crude oil that amounts to 75 per cent of the expansion capacity for an average term of 17 years reflecting the value the project has to the overall market."
When completed, the expansion will increase the capacity of the Keystone Pipeline System from 590,000 barrels per day to approximately 1.1 million barrels per day. The US$12 billion system is 83 per cent subscribed with long-term commitments of 910,000 barrels per day for an average term of approximately 18 years.
The Keystone expansion is a 3,200-kilometre (1,980-mile), 36-inch crude oil pipeline stretching from Hardisty, Alberta and moving southeast through Saskatchewan, Montana, South Dakota and Nebraska. It will link up with a portion of the Keystone Pipeline that will be built through Kansas to Cushing, Oklahoma. The pipeline will then continue on through Oklahoma to a delivery point near existing terminals in Nederland, Texas to serve the Port Arthur, Texas marketplace.
Applications for U.S. regulatory approvals are proceeding and decisions are anticipated during the fourth quarter of 2010. Construction is expected to begin in the first quarter of 2011 and we expect deliveries of crude oil to the U.S. Gulf Coast to begin in the first quarter of 2013.
TransCanada continues to make progress on the initial phase of Keystone that will deliver crude oil to the U.S. Midwest. Line fill continues with crude oil expected to reach Patoka, Illinois in mid-2010. The Keystone project is an important part of TransCanada's current $22 billion capital program, a program that is expected to lead to significant growth in cash flow and earnings over the next five years.
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