September 30, 2015 / 4:08 PM / 2 years ago

UPDATE 1-TransCanada changes tack in seeking Nebraska Keystone approval

3 Min Read

(Adds TransCanada and analyst quotes, background)

By Nia Williams

Sept 30 (Reuters) - TransCanada Corp said on Wednesday it will seek approval from the Nebraska Public Service Commission to build its long-delayed and controversial Keystone XL crude oil pipeline route through the state.

The company is also withdrawing eminent domain actions, which would force some reluctant Nebraska landowners to let TransCanada lay the pipeline across their land in exchange for payment, and terminating constitutional court proceedings relating to those actions.

TransCanada spokesman Mark Cooper said applying through the Nebraska Public Service Commission would likely be quicker than going through the courts.

"This process will likely be seven to 12 months for a decision, as opposed to one where we do not have an estimated timeline," Cooper said.

"Despite having route authority to construct Keystone XL, uncertainty in the courts around the constitutionality of how the route was approved was very likely to carry on once again to the Nebraska Supreme Court."

Opposition in Nebraska has been one of several major hurdles facing the Keystone XL project, which has been waiting more than six years for U.S. presidential approval.

The 830,000 barrel per day pipeline will help carry crude from Alberta to refineries on the U.S. Gulf Coast and has run into fierce resistance from landowners and environmental groups opposed to oil sands development.

The proposed route for the pipeline was evaluated by the Nebraska Department of Environmental Quality and approved by the Nebraska Governor in 2013.

A Nebraska Supreme Court decision in January this year ruled in support of the pipeline, but a number of Nebraskan landowners filed suits against TransCanada alleging the project violated the state's constitution.

The U.S. State Department is yet to grant approval for the pipeline and many industry analysts expect President Barack Obama to veto the project, after he questioned how beneficial it will be for the United States.

CIBC equity analyst David Noseworthy said the move by TransCanada to seek approval from the Public Service Commission was a sign the company is preparing for whoever is elected as the new U.S. President next year.

"They know they are getting a negative decision from the president. What they are really doing is trying to set things up for after the election," Noseworthy said. (Additional reporting by Arpan Varghese and Krishna Chaithanya in Bengaluru; Editing by Marguerita Choy)

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