UPDATE 4-TransCanada firm on Keystone XL plans as obstacles mount

Thu Feb 20, 2014 4:59pm EST
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(Recasts initial 11 paragraphs to include additional detail and executive and analyst comment; updates shares.)

By Julie Gordon and Scott Haggett

TORONTO/CALGARY Feb 20 (Reuters) - TransCanada Corp said on Thursday that it will not back away from the controversial Keystone XL pipeline despite an unfavorable Nebraska court ruling and more than five years of political wrangling in Washington over the project.

Russ Girling, chief executive of Canada's No.2 pipeline operator, said there is a clear need for the $5.4 billion project to move rising oil sands and shale oil production to Gulf Coast refineries.

"As long as demand stays there and our customers want this pipeline built TransCanada will be 100 percent committed to getting it done," Girling said on a conference call. "That's not to say that I'm not frustrated and disappointed by the continued delays but at some point in time the pipeline has got to get built ... TransCanada will stay in this thing until it gets completed."

A Nebraska court on Wednesday threw another wrench into the company's plans, which are awaiting a final presidential approval allowing construction to begin, when it ruled the governor did not have the right to approve Keystone XL's route though the state.

The ruling, which is being appealed by Nebraska's attorney general, caused jittery investors to knock down TransCanada's share price by more than 2 percent. It closed down C$1.07 to C$48.83 on the Toronto Stock Exchange.

"I think the stock is purely down today on the Nebraska situation," said Carl Kirst, an analyst at BMO Capital Markets. "I still believe that the odds ultimately favor it happening, but boy is it a slog getting there and this is just one more wrench in that process."

Girling said he was confident the latest decision would not derail the approval process now underway at the U.S. State Department.   Continued...