TransCanada plans direct oil line to Gulf Coast

Feb. 25, 2008
TransCanada Corp. said it is considering an oil pipeline directly to the US Gulf Coast from Alberta's oil sands, press reports said Feb. 21.

By OGJ editors
HOUSTON, Feb. 25 -- TransCanada Corp. said it is considering an oil pipeline directly to the US Gulf Coast from Alberta's oil sands, press reports said Feb. 21.

An alternative would be to connect Alberta oil sands with Gulf Coast refineries by converting underused natural gas pipelines for part of the route, Chief Executive Officer Hal Kvisle was reported as saying.

Nearly half of total US refining capacity is on the Gulf Coast, but the lack of pipeline connections from Canada results in most Canadian oil sands exports' being sent to the US Midwest.

TransCanada and ConocoPhillips, in a 50-50 joint venture, already are planning the 590,000 b/d Keystone oil pipeline to the US Midwest from Alberta, and plan to extend Keystone to the Gulf Coast refining hub. The $5.2 billion Keystone line is expected to come into service in late 2009. TransCanada will convert existing gas pipelines in Canada to oil shipping for much of Keystone's Canadian section.

"But if the demand for transportation materializes more quickly, we would look at building a direct line," Kvisle was quoted as saying. "Either way, the discussions are well advanced, and this is one of the future projects that we will be bringing forward here in the months ahead."

The proposed pipeline would be competing with others planned by Enbridge Inc., ExxonMobil Corp., Kinder Morgan Canada, and Altex Energy Ltd., each of which is proposing an oil pipeline from Alberta to the Gulf Coast.