TransCanada Advances Keystone Oil Pipeline Project
TransCanada continues to make significant progress on the Keystone Pipeline project. Based on strong industry support, TransCanada has entered into contracts or conditionally awarded approximately U.S. $3.0 billion for major materials and pipeline construction contractors and is continuing to secure land access agreements in preparation for the start of construction in the spring of 2008. Based on the increased size and scope of the project and the executed material and service construction contracts, the capital cost of Keystone is expected to be approximately U.S. $5.2 billion.
TransCanada intends to file an application with the National Energy Board (NEB) in November for additional pumping facilities required to expand Keystone from a nominal capacity of approximately 435,000 barrels per day to 590,000 barrels per day. Plans to expand Keystone were originally announced earlier this year following the successful completion of an open season during which an additional 155,000 barrels per day of firm contracts from Hardisty, Alberta to Cushing, Oklahoma were secured. In total, Keystone has secured firm long-term contracts for a total of 495,000 barrels per day with an average duration of 18 years.
Producers and refiners continue to express an interest in contracting for additional volumes. In response, Keystone intends to hold a binding open season before the end of the year for the remaining capacity.
"The support from committed shippers and ongoing expressions of interest for additional capacity clearly confirms the value of Keystone as a competitive way to link growing oilsands supply to U.S. energy markets," said Hal Kvisle, TransCanada president and CEO. "We remain committed to ensuring that timely new oil pipeline capacity is available to meet industry needs."
The 3,456-kilometer (2,148-mile) Keystone Pipeline will transport crude oil from Hardisty, Alberta to U.S. Midwest markets at Wood River and Patoka, Illinois and to Cushing, Oklahoma. The Canadian portion of the project involves the conversion of approximately 864 kilometers (537 miles) of existing Canadian Mainline pipeline facilities from natural gas to crude oil transmission service and construction of approximately 373 kilometers (232 miles) of pipeline, pump stations and terminal facilities at Hardisty, Alberta. The U.S. portion of the project includes construction of approximately 2,219 kilometers (1,379 miles) of pipeline and pump stations. It is expected that on start-up in late 2009 Keystone will be capable of delivering 435,000 barrels per day to Wood River and Patoka, Illinois. It will be expanded to 590,000 barrels per day and extended to Cushing, Oklahoma in late 2010.
Keystone has received NEB approval for two major regulatory applications this year to construct and operate the Canadian portion of the project. Applications for U.S. regulatory approvals at federal and state levels are proceeding.
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