* Sees Cushing-Gulf Keystone XL leg by end of 2012
* Remainder of XL project complete mid-2013
* Net income C$0.50 per share, up 24 pct
* Comparable earnings up 30 pct at C$0.51/shr
* Small miss on comparable expectations of C$0.52/shr
* Shares up 0.5 pct (Adds details and comment; in U.S. dollars unless noted)
CALGARY, Alberta, July 28 (Reuters) - TransCanada Corp (TRP.TO), said on Thursday a key leg of its $7 billion Keystone XL project could be completed by the end of next year, if the controversial project receives U.S. regulatory approvals by the end of December.
The company, which reported a 24 percent rise in second-quarter profit on Thursday, said it could complete the leg of Keystone that runs from Cushing, Oklahoma, to U.S. refineries along the Gulf of Mexico within 12 months, offering relief to the brimming storage tanks at the Cushing hub.
The remaining portion of the line, running from Hardisty, Alberta, to Steele City, Nebraska, would take a further six months.
"Our current plan is to complete the Cushing-to-Gulf section sometime towards the end of 2012," Russ Girling, the company's chief executive said on a conference call.
"At the same time, in parallel, we'll start construction of the section from Hardisty to Steele City. That process will take more like 18 months to construct."
A flood of Canadian oil into the Cushing hub, where the New York Mercantile Exchange's benchmark West Texas Intermediate oil contract is priced, has pushed North American oil prices well below the European Brent benchmark.
The glut could be lowered, and prices strengthened, by additional pipeline space to the Gulf Coast, home to 40 percent of U.S. refining capacity. While a number of projects have been proposed, TransCanada's is the nearest to completion.
However the company is still awaiting U.S. approvals for 500,000 barrel per day expansion project. It faces strong opposition from environmental groups, as well as some state and federal legislators, concerned about greenhouse gas emissions from expanded oil sands production in northern Alberta and by the threat of oil spills in sensitive areas along the route.
The U.S. State Department said last week it will issue a final environmental assessment on the Keystone XL project in August and then government agencies will have 90 days to comment on it.
Despite the controversy, TransCanada believes the project will be approved by year-end and it expects to be able to begin construction soon after.
"We are truly shovel-ready," Girling said. "Our construction plans are in place for early 2012 and we're very anxious to get moving forward with this project."
The company, Canada largest pipeline and power concern, reported net income of C$367 million ($385 million), or 50 Canadian cents a share, up from C$295 million, or 41 Canadian cents, in the second quarter of 2010.
Comparable earnings, which exclude most one-time items, rose 30 percent to C$357 million, or 51 Canadian cents, from C$275 million, or 40 Canadian cents. That lagged the average analyst forecast for the measure of 52 Canadian cents, according to Thomson Reuters I/B/E/S.
The company said its profit rose as the first phase of Keystone, which takes crude from Hardisty to Wood River and Patoka, Illinois, and the storage hub at Cushing, added to earnings after construction of a final leg was completed in February.
It also brought new gas pipelines on stream in Mexico, Alberta and the U.S. West, while new power plants in Arizona and Ontario also added to earnings
Revenue rose 11 percent to C$2.14 billion.
TransCanada shares gained 19 Canadian cents to C$40.04 on Thursday on the Toronto Stock Exchange.
$1=$0.95 Canadian Reporting by Scott Haggett; editing by Rob Wilson