TransCanada awaits Nebraska ruling amid ‘urgency’ of final decision
TransCanada 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 Morgan Canada Inc.’s Trans Mountain pipeline expansion from Alberta to 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 the steel and other long-lead items 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 Public Service Commission held hearings into Keystone XL’s pipeline route in August and is due to hand down a decision by Nov. 23.
TransCanada 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 the 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 in line with expectations, partly due to the strong performance of its base Keystone pipeline.
TransCanada 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, TransCanada is open to further expanding its U.S. portfolio if certain “crown jewels” become available, Girling said. TransCanada 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.”