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TransCanada moves projected Keystone XL startup to 2015

TransCanada has moved its expected in-service date for the Keystone XL crude pipeline to early 2015, a 1-year delay from previous statements. The company updated the project’s status as part of its 2011 earnings report, in which it also reiterated its expectations that a reapplication for the US Presidential Permit denied in January would be processed in an expedited manner.

The company concluded an open season in December 2011 for its Houston Lateral project and signed long-term contracts to transport crude oil from Hardisty, Alta., to Houston, Texas. The project would increase Keystone XL’s capacity to 830,000 b/d and involve construction of a 50-mile pipeline extension from the proposed Keystone XL expansion. TransCanada says the Houston lateral would allow Keystone to directly reach more than 4-million b/d of US Gulf Coast refining capacity by early 2015, more than double the amount reachable without it.

TransCanada secured additional contractual support for the Cushing Marketlink project, which would transport crude oil from Cushing to Port Arthur, Tex., and Houston, in fourth-quarter 2011. The project would use a portion of the Keystone XL facilities, including the Houston Lateral. The company projected an early-2015 start up for this project as well, but last month confirmed that it would not advance independent of Keystone XL (OGJ Online, Jan. 20, 2012).

The company is also pursuing opportunities to transport Bakken shale crude oil from the Williston Basin in Montana and North Dakota to major US refining markets, including the possibility of developing a stand-alone system independent of Keystone XL (OGJ Online, Jan. 20, 2012). TransCanada early last year secured firm 5-year shipper contracts totaling 65,000 b/d for its proposed Bakken Marketlink project, transporting crude from Baker, Mont., to Cushing on facilities forming part of Keystone XL (OGJ Online, Jan. 21, 2011), but started exploring alternatives following denial of the Presidential Permit. If Keystone XL advances, TransCanada expects Bakken MarketLink to also enter service early-2015.

TransCanada estimates the capital cost of Keystone XL, including the Houston Lateral, at $7.6 billion, with $2.4 billion having been spent as of end-2011.

The company also addressed natural gas pipeline activities in its 2011 earnings, saying that The Alaska Pipeline Project team continues to work with shippers to resolve conditional bids received as part of the project's open season. TransCanada said it is working toward the US Federal Energy Regulatory Commission application deadline of October 2012 for the project’s Alberta option (moving gas from Alaska to the Alberta System and on to other continental markets), but had also started discussions with Alaska North Slope producers on the LNG option (moving gas from Prudhoe Bay to Alaska’s southern coast for liquefaction and shipment).

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


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