TransCanada to expand Keystone oil pipeline system

TransCanada has secured 155,000 b/d of additional long-term, firm capacity contracts on its planned 1,845-mile Keystone oil pipeline.

By OGJ editors
HOUSTON, July 9 -- TransCanada Corp. has secured 155,000 b/d of additional long-term, firm capacity contracts on its planned 1,845-mile Keystone oil pipeline, enabling a 294-mile extension to Cushing, Okla., and facilitating plans to move forward with a further extension to the US Gulf Coast. The $1.7 billion (Can.) Keystone project will deliver oil from Alberta's growing oil sands regions to the US.

When the mainline enters service in late 2009, it will have an initial nominal capacity to transport 435,000 b/d of oil from Hardisty, Alta., to the US Midwest at Wood River and Patoka, Ill. The $445 million (Can.) expansion to Cushing includes construction of the lateral from the Nebraska-Kansas border to Cushing and installation of additional pump stations. Provided that all regulatory approvals are received, lateral construction could begin in early 2008 and operations start-up, in late 2010.

With the acquisition of the long-term contracts, which total 495,000 b/d, capacity of the system will be expanded to 590,000 b/d.

"With this support, we expect to move to the next phase of the project, expanding the pipeline to the US Gulf Coast," said TransCanada Chief Executive, Hal Kvisle. "We plan to market capacity for this next expansion throughout the balance of 2007."

In February, TransCanada received approval from Canada's National Energy Board (NEB) to transfer a portion of its Canadian mainline gas transmission facilities to the Keystone pipeline subject to the approval of a facilities application to construct and operate Keystone's $664 million (Can.) Canadian facilities, which will consist of 371-km of oil pipeline, terminal facilities at Hardisty, Alta., and pump stations.

An NEB public hearing on the application concluded June 21. TransCanada also has submitted applications for US regulatory approvals at federal and state levels.

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