TransCanada considers rail as Keystone XL alternative, Girling says

TransCanada Corp. is considering rail as an alternative to its proposed Keystone XL pipeline, Chief Executive Officer Russ Girling said for the first time on May 21. His response to a reporter’s question during a conference in New York indicated the Calgary transmission company was looking at the more expensive alternative to its 1,179-mile project from Hardesty, Alta., to Steele City, Neb.

“We are absolutely considering a rail option,” Girling told a Reuters reporter at the conference. “Our customers have needed to wait for several years, so we’re in discussions now with them over the rail option.”

Rail would be a temporary solution, he added in a May 22 story in the Washington-based newspaper The Hill. “Our customers asked whether we would explore with them potentially building rail-car loading facilities [at Hardesty]…and we’ve said we will do that, and we’ll do it expeditiously,” Girling said.

Responding to an inquiry from OGJ, a TransCanada spokesman confirmed the reports on May 23. “We are looking at how to modify existing contracts with our customers to allow for rail shipments as we wait for US permits approving the construction of Keystone XL,” he said.

“Similar to other developments, rail loading and unloading facilities proximate to our existing infrastructure or our planned infrastructure would be required,” the spokesman said, adding, “Shippers and market demand would determine where along with ultimate market destinations.”

He explained that this would require modifying TransCanada’s current contractual relationships, which is what its customers asked the company to examine. A typical unit train can move about 100,000 b/d, and new loading and unloading facilities would be designed to accommodate multiple unit train movements daily, he indicated.

“It is too early to know exactly what it will cost or what all will be involved,” the spokesman said. “Some of our customers may have existing relationships in place with rail companies, while others do not. So it may involve the construction of some new loading and offloading facilities, and that has to be determined.”

Contact Nick Snow at nicks@pennwell.com.

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