TransCanada Proposes Keystone Oil Pipeline Project

TransCanada is proposing a US$1.7 billion oil pipeline project to transport approximately 400,000 barrels per day of heavy crude oil from Alberta to Illinois.

Transporting oil from Hardisty, Alberta to markets at Wood River and Patoka, Illinois, the proposed Keystone Pipeline would be about 3,000 kilometers (1,870 miles) in length. In addition to new pipeline construction, it would require the conversion of 1,240 kilometers (770 miles) of one of the lines in TransCanada's existing multi-line Alberta and Mainline natural gas pipeline systems in Alberta, Saskatchewan and Manitoba. TransCanada's other existing pipelines will continue to transport Western Canada's natural gas to markets in Canada and the United States.

"TransCanada is in the business of connecting energy supplies to markets and we view this opportunity as another way of providing a valuable service to our customers," said Hal Kvisle, chief executive officer. "Converting one of our natural gas pipeline assets for oil transportation is an innovative, cost competitive way to meet the need for pipeline expansions to accommodate anticipated growth in Canadian crude oil production during the next decade."

The proposed pipeline would begin in the oil hub of Hardisty, Alberta and extend across Saskatchewan and Manitoba and down through North Dakota, South Dakota, Iowa, Missouri and Illinois.

TransCanada will continue to meet with oil producers, refiners and industry groups, including the Canadian Association of Petroleum Producers, to gauge additional interest and support for the Keystone project. Preliminary discussions with stakeholders including communities, government representatives and landowners along the proposed route have begun.

Later this year, producers, refiners and marketers interested in securing capacity on the pipeline will be invited to participate in a customary, industry-wide Open Season process. TransCanada has received support for this project from a number of producers and refiners. When sufficient support for this project from oil producers and shippers is obtained, TransCanada will proceed with the necessary regulatory applications.

TransCanada will require regulatory approvals from a variety of Canadian and U.S. agencies before construction can begin. Input from all stakeholders will be received through the regulatory process and an extensive public consultation process.