Keystone XL crude oil line gets NEB, SD approval

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, Mar. 12 -- Canada’s National Energy Board Mar. 11 approved an application from TransCanada Keystone Pipeline GP Ltd. to construct and operate the Keystone Gulf Coast Expansion Project (Keystone XL), as well as the proposed tolls for the pipeline once it becomes operational.

Keystone XL is a 1,980-mile, 36-in. OD crude oil pipeline extending from Hardisty, Alta., to a delivery point near existing terminals in Nederland, Tex., serving the Port Arthur, Tex., refining market. Keystone XL will interconnect in Cushing, Okla., with a leg of the Keystone pipeline connecting its original terminus in Patoka, Ill., with the Cushing hub before continuing to the Gulf Coast. Line fill to Patoka is under way, with first crude expected to arrive midyear.

The XL expansion will increase the capacity of the Keystone Pipeline System to 1.1 million b/d from 590,000 b/d. The $12 billion system is 83% subscribed with long-term commitments of 910,000 b/d for an average term of about 18 years.

The Canadian portion of Keystone XL involves construction and operation of 529 km of new pipeline and related facilities from Hardisty, Alta., to the US border at Monchy, Sask. NEB approval included 22 conditions, all of which must be met before TransCanada will be granted permission to open the pipeline, as well as an obligation to monitor the pipeline’s greenhouse gas emissions.

NEB said 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 oil with the US Gulf Coast in a manner that would bring economic and other benefits to Canadians.

Separately, TransCanada received a permit from the South Dakota Public Utilities Commission on Mar. 12 to construct and operate the South Dakota portion of Keystone XL line. Additional applications for US regulatory approvals of Keystone XL are under way. TransCanada expects decisions by the fourth quarter.

Construction is expected to begin in first-quarter 2011 with deliveries of oil to the Gulf Coast to begin in first-quarter 2013.

Contact Christopher E. Smith at chriss@ogjonline.com.

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