Name and location
Keystone pipeline Gulf Coast expansion (Keystone XL) project, Canada and the US.
Client
TransCanada Corporation (TransCanada).
Project description
The Keystone XL pipeline project will enable Canadian and US oil producers to have more access to the large refining markets found in the American Midwest and along the US Gulf Coast.
The project proposes a 1 897 km, 36-inch-diameter crude oil pipeline, beginning in Hardisty, in Alberta, and extending south to Steele City, Nebraska, both in the US. This pipeline is a critical infrastructure project for the energy security of the US.
Along with transporting crude oil from Canada, the Keystone XL pipeline will also support the significant growth of crude oil production in the US from producers in the Bakken region of Montana and North Dakota.
The pipeline will have capacity to transport 830 000 bbl/d of oil to Gulf Coast and Midwest refineries, reducing American dependence on oil from Venezuela and the Middle East by up to 40%.
Value
$8-billion.
Duration
TransCanada expects to have the pipeline in service by 2015.
Latest developments
The Republican-led US House of Representatives has approved the Keystone XL pipeline, but a similar measure has struggled to get enough support in the Senate and President Barack Obama has indicated that he might use his veto if the Bill is passed in Congress.
The legislation, approved by 252 votes to 161, circumvents the need for approval of TransCanada Corp's $8-billion project by the Obama administration, which has been considering the project for more than six years. No Republicans voted against the measure, while 31 Democrats voted for the Bill.
This is the ninth time the House of Representatives has passed a Keystone bill, and supporters were confident that, this time, the Senate would follow suit.
However, passage was not assured in the Senate. Supporters were still one vote shy of the 60 needed to overcome a filibuster, a blocking procedure.
Approval for the pipeline has rested with the Obama administration because it crosses an international border.
The decision has been pending amid jousting between proponents of the pipeline, who say it will create thousands of construction jobs and environmentalists, who say it will increase carbon emissions linked to climate change.
If the measure is passed in Congress, Obama will have to decide whether to make rare use of his veto power.
While the White House has not said if he will do this, Obama has threatened to use his veto in the past. Obama still favours the evaluation that is being carried out by the State Department.
Noting legal action in Nebraska, where a court is expected to rule in coming weeks on a case over the pipeline's route in the state, Obama said "until we know what the route is, it's very hard to finish that evaluation. And I don't think we should short-circuit that process."
The House vote will have no effect on the State Department’s review.
Meanwhile, TransCanada is in talks to get into the crude-by-rail business and will probably do so even if its long-delayed Keystone XL pipeline gets its US permits next year, CEO Russ Girling has said.
While Canada’s number-two pipeline operator has not yet signed any definitive agreements, it is in active negotiations with producers and other shippers on opportunities.
Girling adds that with Canadian and US oil production rapidly expanding, TransCanada expects rail will be a larger part of the transportation mix going forward, "so it's likely a business that we're in long-term irrespective of Keystone."
Earlier this year, TransCanada said it would consider a rail bridge option across the Canada-US border if Keystone XL failed to gain US approvals. Oil moved across the border by train could then be loaded on the pipeline.
Key Contracts and Suppliers
None stated.
On Budget and on Time?
Keystone XL has been delayed, owing to the rejection of TransCanada’s application for a permit to build and operate the project.
Contact Details for Project Information
TransCanada, tel +1 866 717 7473 or email keystone@transcanada.com.