VANCOUVER (Reuters) - TransCanada Corp (TRP.TO) (TRP.N) is still committed to building the Keystone XL pipeline despite stubborn opposition in the United States that has thrown the C$8 billion ($6.2 billion) project into regulatory limbo, the chief executive of the Canadian company said on Friday.
But even as hopes fade that the Obama administration will approve the controversial cross-border pipeline, CEO Russ Girling said he has not yet decided if he will use the NAFTA trade agreement to try to push it through.
“At this point in time that’s not a focus we have,” Girling said when asked if he’d consider a trade challenge if the project was ultimately blocked. “No decisions have been made, so it would be premature to speculate.”
Girling spoke after the company reported that profits from existing Keystone operations helped TransCanada post higher-than-expected quarterly profit.
The company also warned that the price tag of its C$12 billion Energy East pipeline, which would carry Alberta crude to refineries and export markets Eastern Canada, will likely increase due to higher building costs and route changes.
Girling said demand for crude oil is growing in the United States and there remains a strong need for Keystone XL, adding that the focus was on resolving regulatory and legal issues, and preparing for construction.
“TransCanada, and its shippers, remain 100 percent committed to this project,” he said.
On Wednesday, Canadian Prime Minister Stephen Harper said he was not hopeful that the United States would approve the northern leg of project, which has awaited a Presidential permit for more than six years.
On the natural gas front, TransCanada said it expects to have all permits in hand in the third quarter for two pipelines linked to proposed liquefied natural gas export terminals on British Columbia’s coast.
Comparable earnings before interest, taxes, depreciation and amortization (EBITDA) from the Calgary-based company’s Keystone system rose 25 percent to C$320 million in the three months to June 30.
EBITDA from its cross-country Canadian Mainline pipeline, which carries natural gas from Alberta to Ontario, rose 6 percent to C$583 million.
TransCanada’s profit rose to C$397 million, or 56 Canadian cents per share, in the quarter, from C$332 million, or 47 Canadian cents per share, a year-earlier.
Analysts on average had expected earnings of 52 Canadian cents per share, according to Thomson Reuters I/B/E/S.
The stock closed up 0.75 percent at C$50.75 on the Toronto Stock Exchange on Friday.
Additional reporting by Sneha Banerjee in Bengaluru; Editing by Anil D'Silva, Ted Kerr and David Gregorio