TC Energy Corp. will proceed with construction of its 1,210-mile Keystone XL crude oil pipeline. The line will carry 830,000 b/d from Hardisty, Alta., to Steele City, Neb., where it will connect with the company’s existing system to reach US Gulf Coast refiners. The pipeline is expected to enter service in 2023.
Keystone XL is underpinned by new 20-year transportation service agreements for 575,000 b/d. Once the pipeline is in service, current contracts for 115,000 b/d from Hardisty to the US Gulf Coast on the existing Keystone line also will shift to Keystone XL under renewed 20-year contracts.
The US Department of State issued a final supplemental environmental impact statement (SEIS) for the project in December 2019. The final SEIS supplemented the 2014 Keystone XL SEIS and underpins US Bureau of Land Management (BLM) and US Army Corps of Engineers (ACE) permits.
On Feb. 7, 2020, TC Energy received approval from the BLM allowing for construction of the Keystone XL pipeline across federally managed lands in Montana and land managed by the ACE at the Missouri River (OGJ Online, Feb. 14, 2020).
Subject to terms and conditions outlined in the agreements, 50% of any difference between the project’s estimated capital cost and its final cost are subject to a sharing mechanism and will be reflected in pipeline tolls.
The Government of Alberta has agreed to invest about $1.1 billion as equity in Keystone XL, substantially covering planned construction costs through end-2020. Remaining capital investment of roughly $6.9 billion is expected to occur in 2021-22 and be funded through the combination of a $4.2-billion project-level credit facility to be fully guaranteed by the Government of Alberta and $2.7 billion from TC Energy.
TC Energy said it will continue to take guidance from all levels of government and health authorities to ensure the safety of crews and community members during the COVID-19 pandemic and that construction would advance only after taking into account “every consideration for the health and safety of our people, their families, and of those in the surrounding communities.”