CALGARY Alberta (Reuters) - The total cost of TransCanada Corp’s controversial Keystone XL pipeline is likely to nearly double following six years of regulatory delays, a company spokesman said on Friday.
TransCanada spokesman Shawn Howard confirmed comments made by chief executive officer Russ Girling during an interview in Washington, D.C., on Thursday. The comments were first reported by The Wall Street Journal.
In an email, Howard said Girling had said the cost of the pipeline, previously estimated at $5.4 billion, had risen significantly. The CEO also indicated that the new estimate in the billions “gets you into the high single-digits to a 10 number,” the spokesman wrote.
The project to build the 1,179 mile (1,900-km) pipeline to carry 830,000 barrels per day of Canadian crude from Alberta’s oil sands to the Gulf Coast, is in its sixth year of waiting for a U.S. permit after running into fierce environmental opposition.
The increased costs were the result of a protracted regulatory process, inflation, fluctuating currency rates, labor contracts, materials storage and additional conditions put into place for the pipeline, the spokesman said.
“It is worth noting that increased project costs mean higher costs for refiners and consumers - and those costs will likely be passed on to all of us as consumers,” Howard said.
Confirmation of higher Keystone XL costs came as Reuters reported a number of U.S. hedge funds were reviewing the pipeline operator as a potential break-up candidate.
Reporting by Nia Williams, editing by G Crosse