UPDATE 2-TransCanada sees crude-by-rail investment even if Keystone built

Wed Nov 19, 2014 5:42pm EST
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(New throughout, adds comments about oil-by-rail plans)

By Julie Gordon

VANCOUVER Nov 19 (Reuters) - TransCanada Corp is in talks to get into the crude-by-rail business and will probably do so even if its long-delayed Keystone XL pipeline gets its U.S. permits next year, its chief executive said on Wednesday.

While Canada's No. 2 pipeline operator has not yet signed any definitive agreements, it is in active negotiations with producers and other shippers on opportunities, CEO Russ Girling said on a conference call.

"If I were to put a probability one it, I'd say there's a better than 50-50 chance that we will be in that business in some form or fashion in the future," he said.

Girling added that with Canadian and U.S. oil production rapidly expanding, TransCanada expects rail will be a larger part of the transportation mix going forward, "so it's likely a business that we're in long-term irrespective of Keystone."

Earlier this year, TransCanada said it would consider a rail bridge option across the Canada-U.S. border if Keystone XL failed to gain U.S. approvals. Oil moved across the border by train could then be loaded on the pipeline.

On Tuesday, a bill to force approval of the pipeline project failed in the U.S. Senate. A State Department review is still underway.

On Wednesday, Canadian Ambassador Gary Doer told Reuters he still expects project to be approved at some point.   Continued...