TransCanada again extends Keystone XL schedule

Tue Feb 14, 2012 5:32pm EST
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By Scott Haggett

CALGARY, Alberta (Reuters) - TransCanada Corp (TRP.TO: Quote), the backer of the Keystone XL pipeline, said on Tuesday it plans to soon reapply for U.S. approvals for the project, adding that the line would be further delayed and raising its cost estimate to $7.8 billion.

The company, which reported a 39 percent rise in net income on Tuesday and boosted its dividend by 4.8 percent, said it expects to have the 830,000 barrel Alberta-to-Texas oil pipeline up and running by early 2015 after last estimating it could be operating by late 2014.

Alex Pourbaix, the head of TransCanada's pipeline division, said the schedule was revised because the company now expects it will not receive the required presidential permit clearing construction until the first quarter of 2013.

"We've always said that the time period for construction of Keystone XL would be two full years and we're just taking a look at the timeframe," he said on a conference call. "We believe that a reasonable date to get a new Presidential Permit is in Q1 of 2013, and it was really just simple math."

The Obama administration has twice withheld approval for the Keystone XL line, once in November when it delayed a decision until after the 2012 presidential election and again last month, when Republican legislators tried to force the president to make a final decision on the line. Barack Obama rejected that bid because environmental studies were incomplete.

But TransCanada maintains that Obama's denial was not based on the merits of the project and it plans to re-apply for the crucial Presidential Permit in the near future.

"I don't have any reservations that this pipeline is going to get completed," said Russ Girling, the company's chief executive. "The U.S. needs to import some 10 million barrels a day of oil, every day, and currently get it from places like Venezuela, Saudi Arabia, Nigeria. We're just going to replace that oil with Canadian oil."

At the request of shippers who have contracted for capacity on Keystone XL, TransCanada is still mulling first completing the leg of the pipeline that would run from the bloated oil storage hub at Cushing, Oklahoma, to Texas refineries on the Gulf of Mexico.   Continued...