UPDATE 2-TransCanada opens Gulf Coast line, breaking U.S. oil bottleneck

Wed Jan 22, 2014 2:47pm EST
 
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By Scott Haggett and Nia Williams

CALGARY, Alberta Jan 22 (Reuters) - TransCanada Corp on Wednesday began delivering crude through a major new pipeline from Oklahoma to the Gulf Coast, commissioning a $2.3 billion project expected to help eliminate a bottleneck that has warped the U.S. oil market for three years.

For company officials, the launch of the 700,000-barrel-per-day conduit -- originally conceived as the southern leg of the contentious Keystone XL line from Canada -- was a chance to claim a milestone in the drive toward reducing U.S. reliance on foreign oil, hailing the project for delivering cheaper crude to Gulf refiners and creating thousands of U.S. jobs.

For oil traders, the line from the bloated Cushing crude oil storage hub to the cluster of refineries on the Gulf Coast of Texas is a major step toward erasing the yawning gap between depressed inland domestic crude oil prices and the much higher global prices paid on the coast.

Above all, it was an opportunity to vent TransCanada's mounting frustration over its main Keystone XL line, which, more than five years after the initial filing, is still awaiting a final decision from the Obama Administration.

"As we bring Gulf Coast into operation, again showing people this isn't an export pipeline and (will be) operated safely, that should provide the base underpinning and evidence that Keystone XL is at the end of the day just another piece of energy infrastructure," Russ Girling, TransCanada's chief executive, told reporters. "It is just a pipeline and it can be built and operated safely."

REFINERS' REJOICE   Continued...