TransCanada Secures Long-Term Commitments for Keystone Project
TransCanada Corporation says that the Keystone Oil Pipeline project has secured firm, long-term contracts totalling 340,000 barrels per day with duration averaging 18 years. The commitments were obtained through the successful completion of a binding Open Season held during the fourth quarter of 2005. With these commitments from shippers, TransCanada will proceed with regulatory filings for approval of the estimated US$2.1 billion pipeline project that will transport crude oil from Alberta to U.S. mid-west refineries.
"The positive commercial response we received confirms that shippers recognize the value of our project as a cost-competitive way to link growing oil sands supply to U.S. energy markets," said TransCanada chief executive officer, Hal Kvisle. "With crude oil production from the oil sands expected to grow by approximately 1.5 million barrels per day over the next 10 years, TransCanada's Keystone project will help meet a critical need for additional pipeline infrastructure."
Public and stakeholder consultation and detailed engineering work will continue throughout 2006. Before construction can begin, Keystone will require regulatory approvals from a variety of Canadian and U.S. agencies. Specifically, TransCanada will file applications with the National Energy Board in 2006 for project approvals. Construction is proposed to begin in late 2007, with commercial operations scheduled to commence by the fourth quarter of 2009.
As outlined in the memorandum of understanding (MOU) signed between TransCanada and ConocoPhillips Pipe Line Company (CPPL) on Nov. 3, 2005, CPPL has the right, upon certain conditions, to acquire up to a 50 per cent participating interest in the project. ConocoPhillips Company, CPPL's parent, has committed to ship crude oil on the pipeline system.
Once constructed, the Keystone Oil Pipeline will be capable of transporting approximately 435,000 barrels per day of crude oil from Hardisty, Alberta, to Patoka, Illinois, through a 1,830-mile (2,960-kilometer) pipeline system. The pipeline can be expanded to 590,000 barrels per day with additional pump stations. In addition to approximately 1,070 miles (1,730 kilometers) of new pipeline construction in the United States, the Canadian portion of the proposed project includes the construction of approximately 230 miles (370 kilometers) of new pipeline and the conversion of approximately 530 miles (860 kilometers) of existing TransCanada pipeline facilities from natural gas to crude oil transmission.
Shippers have also expressed interest in proposed extensions of the Keystone pipeline system to Cushing, Oklahoma and Fort Saskatchewan, Alberta. TransCanada expects to hold a binding Open Season for these two extensions later this year.
TransCanada is a leader in the responsible development and
reliable operation of North American energy infrastructure.
TransCanada's network of approximately 25,600 miles (41,000
kilometers) 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 6,700 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.
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