CALGARY, Alberta (Reuters) - TransCanada Corp (TRP.TO) raised its preliminary cost estimate for the controversial Keystone XL oil pipeline on Tuesday, saying it now expects the project to cost at least $5.4 billion, $100 million more than its prior forecast.
The company said it still expects the 830,000 barrel per day line to be in service within two years of receiving final U.S. approvals for the project.
It warned the new cost estimate, coming two weeks after it last pegged the line’s cost at $5.3 billion, will likely climb again once it knows when it can proceed.
“That number will rise and we’ll firm that up as we get clarity on exact timing,” Don Marchand, TransCanada’s chief financial officer, said at the company’s annual investor day in Toronto.
TransCanada has waited more than five years for the Obama administration to make a final decision on the controversial project, which will take oil from the Alberta oil sands and North Dakota’s Bakken field as far as the Cushing, Oklahoma, storage hub.
The southern leg of the project, running from Cushing to refineries on Texas’ gulf coast, is nearly complete and expected to begin delivering oil by year-end.
Keystone XL, opposed by a host of environmental groups, is awaiting a final review from the U.S. State Department, with a decision expected next year.
TransCanada shares were down 53 Canadian cents to C$46.77 by midafternoon on the Toronto Stock Exchange.
(Changes day to Tuesday from Thursday in first paragraph. In U.S. dollars unless noted.)
Reporting by Scott Haggett; Editing by John Wallace