By OGJ editors
HOUSTON, Nov. 8 -- TransCanada Corp.'s proposed 1,840-mile Keystone pipeline project received a boost Nov. 3 when ConocoPhillips signed a memorandum of understanding committing to ship crude oil on the pipeline.
The system is designed to transport 435,000 b/d of crude oil from Hardisty, Alta., to Patoka, Ill. (OGJ Online, Aug. 9, 2005). ConocoPhillips said the pipeline would further integrate its upstream assets in Canada with its Wood River, Ill., refinery.
At the same time, ConocoPhillips Pipe Line Co. (CPPL) signed the MOU, giving it the right to acquire as much as half ownership in the $2.1 billion pipeline.
The Keystone system will include about 1,100 miles of new pipeline in the US, 220 miles of new pipeline in Canada, and the conversion of 540 miles of existing TransCanada natural gas pipeline facilities to crude oil transmission (see map, OGJ, Feb. 21, 2005, Newsletter). Depending on additional shipper interest and support, there could be potential for other extensions at each end of the pipeline.
The companies plan to finalize the transaction following conclusion of a shippers' binding open season that began Nov. 4. TransCanada said it plans to have the pipeline in service in 2009 if the open season warrants construction and it receives timely regulatory permits.
The Keystone project is one of two competing major systems planned to deliver crude oil from Hardisty to the US Midwest. Enbridge Energy Partners LP, also of Calgary, announced plans earlier this year for an $895 million pipeline expansion to deliver 400,000 b/d of crude oil, from Hardisty to Chicago (OGJ, Aug. 8, 2005, Newsletter).