TransCanada to proceed with stand-alone Cushing-to-Gulf Coast crude pipeline

TransCanada Corp. informed the US Department of State (DOS) that what had been the Cushing-to-US Gulf Coast portion of Keystone XL will be constructed as a stand-alone Gulf Coast Project, not part of a renewed Presidential Permit process for the Keystone XL pipeline.

TransCanada described the project as addressing constraints in bringing crude oil production in Oklahoma, Texas, North Dakota, and Montana to market and as consistent with President Obama’s calls for the potential development of an oil pipeline from Cushing, Okla., to the Gulf of Mexico as a means of increasing US energy security.

The company estimates the cost of the Gulf Coast Project at $2.3 billion and expects the line to be in service second-half 2013.

TransCanada said in its 2011 earnings report that it had in fourth-quarter 2011 secured additional contractual support for its Cushing Marketlink project, which would transport crude oil from Cushing to Port Arthur, Tex., and Houston. Cushing Marketlink would use a portion of the Keystone XL facilities, but TransCanada last month confirmed it would not advance independent of Keystone XL (OGJ Online, Jan. 20, 2012).

TransCanada included notice of its intent to proceed with the Gulf Coast Project as part of informing DOS it plans to file a new Presidential Permit application (cross border permit) in the near future for Keystone XL. TransCanada would supplement the application with an alternative route in Nebraska as soon as that route is selected, and use the already reviewed route in Montana and South Dakota.

Reapplying for the Keystone XL permit is supported by words used in US President Barack Obama's statement Jan. 18 that denial of the permit was not based on the merits of the pipeline but rather on an imposed 60-day legislative timeline to make a decision on the project.

TransCanada said it will continue to work collaboratively with the State of Nebraska on determining an alternative route for Keystone XL that avoids the Sandhills. TransCanada has been working on assessing the routing in Nebraska since November 2011, following the DOS’s notice to delay a decision on a Presidential Permit until an adjusted route that avoids the Sandhills was developed.

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

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