UPDATE 2-TransCanada says Keystone leg to start on time; Brent premium shrinks
By Nia Williams and Matthew Robinson
CALGARY, Alberta Oct 2 (Reuters) - The southern portion of TransCanada Corp's Keystone XL oil pipeline is 95 percent complete and the company is focused starting the line by the end of 2013, a TransCanada spokesman said on Wednesday.
Rumors that the line's start might be delayed into 2014 have dogged the North American crude market in recent weeks. TransCanada's comments that the line would start on schedule helped narrow international Brent crude's premium to U.S. oil futures by around 70 cents to around $5.13 in afternoon trade.
Initial capacity on the Gulf Coast pipeline, which will ship crude from the Cushing, Oklahoma, delivery point of the U.S. oil futures contract to Nederland, Texas, will be 700,000 barrels per day, expandable up to 830,000 bpd, TransCanada spokesman Shawn Howard said.
He declined to discuss customer volume commitments for the line, but added it is "overwhelmingly subscribed".
The market has been focused on the startup of the pipeline as it will provide another conduit to the Gulf Coast refining center for inventories of crude that swelled to record levels earlier this year at Cushing due to surging production from Canada, North Dakota and Texas.
Howard said major construction of the pipeline is expected to be complete by the end of October. Testing on the line is already underway and expected to be complete in early November, and the company will begin filling the line shortly afterwards.
"Once construction is done there's commissioning work that has to take place and continued testing. That will take some time," Howard said in response to questions about when shipping would start. Continued...