TransCanada suspends lawsuit

CALGARY — TransCanada Corp. has suspended a lawsuit against the U.S. government over its contentious Keystone XL pipeline after the proposal was revived last month.

The Calgary-based company has suspended the roughly $15-billion US lawsuit for one month following an invitation by U.S. President Donald Trump during his first week in office to resubmit an application to build the pipeline.

TransCanada confirmed it had suspended the lawsuit in an e-mail Tuesday. The lawsuit was filed in early 2016, after former U.S. president Barack Obama rejected the proposal a few months earlier. Concerns that the pipeline would significantly add to greenhouse gas emissions were a major factor in the decision.

Since it was first proposed in 2008, Keystone XL drew increasing protest from U.S. environmental groups and some residents who lived near the planned route.

In legal filings, TransCanada claims it is seeking compensation because the decision was politically motivated rather than based on the evidence of several studies that had examined the impacts of the pipeline. TransCanada argued the rejection was breach of law under NAFTA.

Analysts believed the company had a strong case against the U.S. government, though it would be unprecedented to win such a suit.

Keystone XL would deliver mostly heavy oil nearly 1,900 km from Hardisty, Alta., to Steele City, Neb. From there, oil would be shipped to refineries in the Gulf Coast via existing pipelines.

Canada’s oil industry has for years lobbied for the building of major export pipelines, which would give producers access to overseas markets and fetch a higher price for Canadian heavy crude, which sells at a discount to international benchmarks.