TransCanada sees Keystone XL delayed till second-half 2015

Fri Apr 26, 2013 4:25pm EDT
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By Scott Haggett and Bhaswati Mukhopadhyay

CALGARY, Alberta (Reuters) - TransCanada Corp, Canada's No. 2 pipeline company, said on Friday the long wait for U.S. government approval of its controversial Keystone XL project will further delay completion of the pipeline and push its cost above the company's $5.3 billion estimate.

TransCanada, which reported a 27 percent rise in first-quarter profit on Friday, is waiting for the Obama administration to issue a presidential permit for construction of the line, which is designed to carry 830,000 barrels a day of Canadian and U.S. crude oil to refineries on the Gulf of Mexico coast.

That permit, pending now for more than four years, may face further delays after the U.S. Environmental Protection Agency condemned the State Department's draft environmental review of the project earlier this week, saying it didn't properly address a host of issues ranging from increases in carbon emissions to the pipeline's social impact.

TransCanada, which had maintained that the line could be in service in late 2014 or early 2015, said on Friday the wrangling in Washington will delay its completion until the second half of 2015.

"Due to ongoing delays in the issuance of a presidential permit for Keystone XL, we now expect the pipeline to be in service in the second half of 2015 and, based on our pipeline construction experience, the $5.3 billion cost estimate will increase depending on the timing of the permit," the company said in a release.

Environmental groups have exerted considerable pressure on the White House to block the pipeline, saying it will lead to more greenhouse gas emissions, pollute land and water, and plow through the habitats of endangered species.

TransCanada said it has invested $1.8 billion so far in the project.

Despite the delay, the company said its customers still support the line and none of the contracted shippers have backed out of the project.   Continued...

President and Chief Executive of TransCanada Russ Girling addresses shareholders during the company's annual general meeting in Calgary, Alberta, April 26, 2013. REUTERS/Todd Korol