Keystone XL still ahead of rivals

Thu Dec 15, 2011 7:58pm EST
 
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - TransCanada Corp still has a big advantage in the race to supply U.S. oil markets with Canadian supplies, despite a year's delay to its $7 billion Keystone XL project, because of the preparation already done, Chief Executive Russ Girling said on Thursday.

TransCanada's customers have shown they believe the controversial pipeline is still the best option for moving burgeoning Canadian oil sands and North Dakota shale oil production by signing up for more capacity and backing an extension of the line in Texas, Girling told Reuters in an interview.

In more than 40 months since proposing the development, the company has completed much of the U.S. regulatory process including an environmental impact statement, acquired 93 percent of the right-of-way between Alberta and Texas, ordered and stockpiled the pipe and other equipment and signed construction contracts, he said.

"That's a massive amount of work that anybody who wants to build a pipeline to move the supply to market has to do. And every one of those processes is riddled with complexity and, as we know today, even more difficulty than we've ever had in the past," Girling said.

On Thursday, TransCanada said its shippers were looking beyond the delay by backing a 19 percent increase in the pipeline's capacity to 830,000 barrels a day and a spur line to Houston from the Keystone XL endpoint at Nederland, Texas.

Last month, the U.S. State Department, after studying the project for more than three years, pushed off its decision on whether to approve the pipeline well into 2013, past the U.S. presidential election next November.

Part of the reason was to study moving the proposed route in Nebraska away from an aquifer, and the company and state are currently examining new rights-of-way under an agreement made just days after the State Department's postponement.

"As you can see we've been very responsive and flexible with changes and delays and we'll continue to be. We'll respond," he said. "We've been at this for 60 years. This isn't the first difficult thing. It's one of the more difficult ones we've been through, but this is what we do."   Continued...