Not giv­ing up

Tran­sCanada says it is com­mit­ted to Key­stone XL pipe­line after judge or­ders halt

Journal Pioneer - - CANADA - BY DAN HEAL­ING

The Cana­dian pro­po­nent of the $10-bil­lion Key­stone XL crude pipe­line says it re­mains com­mit­ted to the project de­spite a Mon­tana judge’s rul­ing that it must pass a fur­ther en­vi­ron­men­tal re­view.

The com­pany has re­ceived the judge’s rul­ing and is re­view­ing it, said Tran­sCanada Corp. spokesman Terry Cunha in a brief email on Fri­day.

U.S. Dis­trict Judge Brian Mor­ris put the project on hold on Thurs­day, rul­ing that the po­ten­tial im­pact had not been con­sid­ered as re­quired by fed­eral law. En­vi­ron­men­tal­ists and Na­tive Amer­i­can groups had sued to stop it, cit­ing prop­erty rights and po­ten­tial oil spills.

The fed­eral court or­der blocks a Trump ad­min­is­tra­tion per­mit for the con­struc­tion of the pipe­line. Mor­ris was ap­pointed by Pres­i­dent Barack Obama. Tran­sCanada shares on the Toronto Stock Ex­change fell by as much as 2.75 per cent in early trad­ing on Fri­day.

“This is the world’s long­est tug of war, with western Cana­dian oil prices as the rope,” said Zachary Rogers, a re­fin­ing and oil mar­kets re­search an­a­lyst at Wood Macken­zie.

“While def­i­nitely a ma­jor set­back in terms of tim­ing, this is un­likely to be the nail in the cof­fin for Key­stone XL. Ex­act le­gal re­course op­tions are un­clear, but the most likely re­sult is ei­ther an es­ca­la­tion through the courts or an ad­di­tional State De­part­ment re­view and Pres­i­dent Trump reap­prov­ing the line.”

A short­age of ex­port pipe­line space to carry away grow­ing oil pro­duc­tion in Al­berta has been blamed for re­cent steep dis­counts in prices for Cana­dian oil as com­pared to New York-traded bench­mark oil. An­a­lysts say as much as 110,000 bar­rels a day of crude oil is cur­rently be­ing left in the ground in Western Canada rather than be­ing pro­duced and sold at un­prof­itable prices.

Last Jan­uary, Tran­sCanada said it had se­cured ship­ping com­mit­ments to­talling roughly 500,000 bar­rels a day on the line, in­clud­ing a deal with the Al­berta gov­ern­ment to ship 50,000 bar­rels a day of provin­cially owned crude.

Other Key­stone XL ship­pers in­clude ma­jor Cal­gary-based oil­sands pro­duc­ers Cana­dian Nat­u­ral Re­sources Ltd., Sun­cor En­ergy Inc. and Cen­ovus En­ergy Inc.

CP PHOTO

A aerial view of Kin­der Mor­gan’s Trans Moun­tain marine ter­mi­nal, in Burn­aby, B.C., is shown ear­lier this year.

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