Fi­nal de­ci­sion on hori­zon for KXL pipe­line

National Post (Latest Edition) - - FINANCIAL POST - Clau­dia Cat­ta­neo Fi­nan­cial Post ccat­ta­neo@na­tion­al­post.com

CAL­GARY• Trans Canada Corp. will pro­ceed with a fi­nal in­vest­ment de­ci­sion on the long- de­layed Key­stone XL pipe­line af­ter the route re­view by reg­u­la­tors in Ne­braska later this month and the eval­u­a­tion of ship­ping com­mit­ments, CEO Russ Gir­ling said Thurs­day.

While he didn’t re­veal a date, Gir­ling said de­mand for oil trans­porta­tion ca­pac­ity re­mains high and ship­pers want to see the project con­structed as soon as pos­si­ble.

“There is cer­tainly ur­gency on the part of our ship­pers to come to a con­clu­sion sooner rather than later,” Gir­ling said in a con­fer­ence call with in­dus­try an­a­lysts.

With the com­pany can­celling last month its pro­posed En­ergy East pipe­line from Al­berta to Canada’s east coast, and Kin­der Mor- gan Canada Inc.’ s Trans Moun­tain pipe­line ex­pan­sion from Al­berta the West Coast mired in reg­u­la­tory and le­gal de­lays, Key­stone XL would help solve trans­porta­tion bot­tle­necks as pro­duc­tion from oil­sands projects con­tin­ues to rise.

The project would trans­port heavy oil from Al­berta to re­finer­ies in the U. S. Gulf of Mex­ico, which re­mains “the largest and most at­trac­tive mar­ket,” Gir­ling said. “We also be­lieve that the Key­stone XL pipe­line is the safest, most ef­fi­cient and most en­vi­ron­men­tally sound way to move that oil from Western Canada to the U. S. Gulf Coast.”

The com­pany al­ready has t he steel and other l ong- l ead i tems re­quired for con­struc­tion that were or­dered be­fore the project was de­nied a per­mit by for­mer U. S. Pres­i­dent Barack Obama due to op­po­si­tion by en­vi­ron­men­tal­ists. If the project moves for­ward, con­struc­tion would take place in 2019 to 2020.

The Ne­braska Publ i c Ser­vice Com­mis­sion held hear­ings into Key­stone XL’s pipe­line route i n Au­gust and is due to hand down a de­ci­sion by Nov. 23.

Trans Canada held an open sea­son to re­assess ship­per in­ter­est af­ter the project was re­vived by U. S. Pres­i­dent Don­ald Trump ear­lier this year.

“We re­ceived a broad in­ter­est and we are cur­rently in the process of an­a­lyz­ing those re­sults,” Gir­ling said. “Over­all, we an­tic­i­pate the sup­port for the project to be sub­stan­tially sim­i­lar to that which ex­isted when we first ap­plied for the Key­stone pipe­line per­mit.”

Some of t he ship­ping com­mit­ments have con­di­tions that need to be eval­u­ated, but ap­pear “man­age­able,” said Paul Miller, pres­i­dent of liq­uids pipe­lines.

Also Thurs­day, the com­pany re­ported net in­come of $ 612 mil­lion in the third quar­ter, com­pared to a net loss of $ 135 mil­lion for the same pe­riod in 2016, that was in­line with ex­pec­ta­tions, partly due to the strong per­for­mance of its base Key­stone pipe­line.

Trans Canada ter­mi­nated the $15.7 bil­lion En­ergy East and East­ern Main­line projects af­ter the Na­tional En­ergy Board ex­panded its re­view to in­clude up­stream and down­stream car­bon emis­sions.

“While this is very dis­ap­point­ing, we con­tinue to progress other medium and longer term or­ganic op­por­tu­ni­ties in our three core businesses,” Gir­ling said.

Mean­while, Trans Canada is open to fur­ther ex­pand­ing its U.S. port­fo­lio if cer­tain “crown jew­els” be­come avail­able, Gir­ling said. Trans Canada bulked up in the U.S. last year with its US$ 10.2 bil­lion Columbia Pipe­line ac­qui­si­tion.

“There are cer­tain as­sets and po­si­tions in the mar­ket place that we covet, and we con­tinue to watch them and if there is op­por­tu­nity to act we will do that,” Gir­ling said. “We have the ca­pac­ity to act, but it’s very rare that these op­por­tu­ni­ties arise.”

MIKE RIDE­WOOD / THE CANA­DIAN PRESS

Tran­sCanada chief ex­ec­u­tive Russ Gir­ling said de­mand for oil trans­porta­tion ca­pac­ity re­mains high and ship­pers want to see the Key­stone XL pipe­line built as soon as pos­si­ble.

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