TransCanada shares drop on Keystone XL delay
CALGARY, Alberta, April 21 (Reuters) - TransCanada Corp shares were down nearly 4 percent on Monday after the Obama administration again delayed a final decision whether to approve the company's contentious Keystone XL pipeline project.
Shares in Canada's No. 2 pipeline company were down C$1.84 at C$49.46 by late morning on the Toronto Stock Exchange after earlier dropping as low as C$49.34. Volume was 1.53 million shares, compared with the 90-day average of just under one million.
The U.S. State Department said on Friday it would give regulatory agencies more time to comment on the proposed project, which would take 830,000 barrels of crude from the Alberta oil sands and North Dakota's shale oil fields to U.S. Gulf Coast refineries.
The new delay, which comes as Nebraska wrangles over the pipeline's final route through the state, will push the date for a final decision from the middle of this year to beyond the U.S. midterm elections in November.
TransCanada submitted its application for the project more than five years ago. Because of the delays, most analysts do not include potential cash flow from the project in their estimates for the company's results. But investors who had expected a decision on Keystone XL this summer might now be selling the shares.
"There may have been some people buying it ... believing they were going to get an uptick because there would be an approval," said Steven Paget, an analyst at FirstEnergy Capital. "Now there is another year of risk."
($1=$1.10 Canadian) (Reporting by Scott Haggett; Editing by Peter Galloway)
© Thomson Reuters 2017 All rights reserved.