(Reuters) - Lower oil prices and alternative export routes are complicating negotiations for shipper commitment for TransCanada Corp’s (TRP.TO) Keystone XL pipeline project, and the company does not have a firm deadline for concluding the talks, Chief Executive Russell Girling said on Friday.
Speaking at a shareholders meeting after the release of a better-than-expected quarterly profit, Girling said while producers are still supportive, they have less money in the current environment.
“A lot of water has gone under the bridge over the last seven or eight years since we’ve proposed that project,” he said.
U.S. President Donald Trump’s administration approved TransCanada Corp’s (TRP.TO) Keystone XL pipeline in March. The extension increases the capacity of the current Keystone system from Canada’s oil-producing Alberta province to the Gulf of Mexico.
Girling said the project may cost less than the $7 billion previously forecast.
“Because of the downturn that we’ve seen, there is less activity,” he said. “We should at least be able to do it at the price we had in our historic forecast, maybe a bit less.”
A future lowering of U.S. corporate taxes, as proposed by Trump, would benefit TransCanada, Canada’s No. 2 pipeline operator, as the company has substantial business in the United States, Girling said.
He said that reduction might free up cash for the company to pursue new projects, but did not go into details.
Earnings from TransCanada’s U.S. natural gas pipelines more than doubled the past quarter, helped by its acquisition of Columbia Pipeline Group Inc last year for about $13 billion.
Profit from its Mexico natural gas pipelines also rose about 162 percent to C$118 million.
The company’s net profit attributable to shareholders rose to C$643 million ($467 million), or 74 Canadian cents per share, in the first quarter ended March 31 from C$252 million, or 36 Canadian cents per share, a year earlier.
The latest quarter included about C$48 million in charges, mainly related to the acquisition of Columbia Pipeline Group. The year-ago quarter included charges of about C$211 million, mainly related to the termination of Alberta power purchase agreements.
Excluding items, the company earned 81 Canadian cents per share, beating analysts’ average estimate of 74 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 35.5 percent to C$3.39 billion, above analysts’ average estimate of C$3.19 billion.
($1 = 1.3775 Canadian dollars)
Reporting by Ethan Lou in Calgary, Alberta, Arathy S Nair in Bengaluru; Editing by Supriya Kurane and Frances Kerry