TransCanada & ConocoPhillips Ink Deal on Keystone Oil Pipeline
TransCanada Corporation, ConocoPhillips Company, and ConocoPhillips Pipe Line Company (CPPL) (a wholly owned subsidiary of ConocoPhillips Company), has entered into a Memorandum of Understanding which commits ConocoPhillips Company to ship crude oil on the proposed Keystone oil pipeline (Keystone), and gives CPPL the right to acquire up to a fifty per cent ownership interest in the pipeline, subject to certain conditions being met. Finalization of this transaction and the terms of the business arrangement are expected to occur after completion of the binding Open Season process, which will begin November 4, 2005.
"We are pleased that ConocoPhillips is joining us on the Keystone project to connect a reliable Canadian oil supply to high-demand energy markets in the U.S. Midwest through a unique, cost-effective pipeline proposal. Our proposed association with ConocoPhillips Pipe Line Company offers shippers the strengths of our two companies with proven expertise in building and operating energy infrastructure," said Hal Kvisle, TransCanada's chief executive officer.
"The Keystone pipeline is an excellent opportunity to further integrate our upstream assets in Canada with our Wood River refinery in Illinois," said Jim Nokes, Executive Vice President, Refining, Marketing, Supply and Transportation for ConocoPhillips. "The pipeline will also play a critical role in supplying North American crude oil to refineries in the U.S. mid-continent region. We are looking forward to working with TransCanada on a project of such importance to both Canada and the United States."
Valued at approximately US$2.1 billion, the Keystone pipeline is intended to transport approximately 435,000 barrels per day of crude oil from Hardisty, Alberta, to Patoka, Illinois through a 1,840-mile (2,950-kilometre) pipeline system. In addition to approximately 1,100 miles (1,700 kilometres) of new pipeline in the United States, the Canadian portion of the proposed project includes the construction of approximately 220 miles (355 kilometres) of new pipeline and the conversion of approximately 540 miles (870 kilometres) of existing TransCanada pipeline facilities from natural gas to crude oil transmission. Depending on shipper interest and support, there is potential for extensions at each end of the pipeline. The Keystone pipeline, upon receipt of the necessary shipper support and appropriate regulatory approvals in Canada and the United States, is expected to be in service in 2009.
Consultation with the public, potentially impacted landowners and other interested stakeholders was initiated immediately after the proposed project was announced in February of 2005 and will continue as the project develops. In November and December, TransCanada will host a series of public open houses in the United States and Canada to provide stakeholders along the proposed pipeline route with information about the project and gather community input.
TransCanada's network of approximately 25,600 miles (41,000
kilometres) of pipeline transports the majority of Western Canada's
natural gas production to key Canadian and U.S. markets. A growing
independent power producer, TransCanada owns, or has interests in,
approximately 6,000 megawatts of power generation in Canada and the
United States. TransCanada's common shares trade on the Toronto and
New York stock exchanges under the symbol TRP. For more information,
go to www.transcanada.com.
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