UPDATE 1-TransCanada seeks U.S. permit on Upland line as Keystone waits

Fri Apr 24, 2015 3:29pm EDT
 
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(Adds State Department Comment, background)

CALGARY, Alberta, April 24 (Reuters) - TransCanada Corp , whose controversial Keystone XL pipeline project has waited more than six years for U.S. approvals, is asking the Obama administration to approve another pipeline, one that would take American crude oil into Canada.

The company, Canada's No. 2 pipeline operator, said it applied on Wednesday for a presidential permit for its planned Upland pipeline, which will carry as much as 220,000 barrels of oil per day 240 miles (386 kilometers) from Williston, North Dakota, to meet the proposed Energy East pipeline in southern Saskatchewan near the border with Manitoba.

The C$600 million ($493 million) Upland line, announced in February, will take crude from North Dakota's prolific Bakken field, where a shortage of pipeline space has forced producers to ship their crude by rail.

"Upland is a gathering system that will help move Williston Basin oil production to markets where it is needed," said Mark Cooper, a company spokesman. "A great deal of this oil is already being transported to market by rail."

The application comes despite the continuing fight over the Keystone XL pipeline, which would take crude from the Alberta oil sands and the Bakken field to the refining hub on Texas' Gulf Coast. Many environmental groups oppose the project, arguing it would encourage the expansion of carbon-dioxide intensive production from the oil sands.

President Barack Obama vetoed a Republican-backed bill in February demanding he approve the line and earlier this year said Keystone would carry oil produced "in an extraordinarily dirty way," a description the Canadian government argues is unfair.

TransCanada first applied for a presidential permit for Keystone XL in 2008 and again in 2012 after coming up with a new route for the line through Nebraska. State Department studies twice concluded the $8 billion line would have an acceptable environmental impact and not contribute to global warming.

An official at the State Department confirmed the office had received the Upland application from TransCanada, but said it has not yet had a chance to review it.

Energy companies are mostly allowed to export U.S. oil to Canada but must apply for a license first.

TransCanada's Cooper said 70,000 barrels per day of oil from the Upland pipeline have been contracted to ship on the Energy East line, expected to be complete in 2020, where it can be shipped to refineries in Eastern Canada or abroad. ($1 = 1.2163 Canadian dollars) (Reporting by Scott Haggett and Timothy Gardner; Editing by Matthew Lewis and Alan Crosby)