3 Min Read
By Nia Williams
LAKE LOUISE, Alberta, Nov 29 (Reuters) - TransCanada Corp has had to renegotiate expiration dates for shipping contracts on its Keystone XL crude oil pipeline at least three times due to delays getting approval to build the pipeline, Chief Executive Russ Girling said on Friday.
He said, however, that 100 percent of shippers have remained committed to the controversial project in each round of renegotiations.
Speaking to reporters after a conference in Lake Louise, Alberta, Girling declined to give the current expiration date, or "sunset date," after which shippers would no longer be contractually obliged to honor their shipping commitments.
But he added that there are no renegotiations ongoing, and said he was "totally comfortable" with the expiration dates now in place, based on TransCanada's forecasts for in-service dates for the pipeline.
The company expects the pipeline to be in service two years after a U.S. presidential permit for its construction is awarded. It says it expects U.S. approval in 2014.
"We are in our sixth year of this process," Girling said. "We have had to renegotiate those contracts a number of times to reset sunset dates. In each one of those iterations 100 percent of our shippers continue to support."
When asked for an exact number on how many times the sunset dates had been pushed back, he added: "I don't have an accurate number but probably three, at least three."
The Keystone XL pipeline project, intended to carry 830,000 barrels per day of heavy crude oil from Alberta's oil sands and the Bakken formation to refineries in the U.S. Gulf Coast region, has been mired in environmental and regulatory controversy for five years.
Some industry observers have speculated that as other export pipeline projects - including TransCanada's own 1.1 million bpd Energy East line to New Brunswick - have been proposed, market support for Keystone XL has waned as producers look for alternative routes to move their oil to market.
Girling said the notion that Keystone is no longer needed or relevant is misplaced, and that shippers from the North Dakota Bakken formation are in support.
"In fact, we have inbound interest from others that aren't shippers today, that have enquired if anybody drops the capacity they would like to take the capacity," he said.