TransCanada Corporation has announced it has sent a letter to the U.S. Department of State (DOS) informing the Department the company plans to file a Presidential Permit application in the near future for the Keystone XL Project from the U.S./Canada border in Montana to Steele City, Nebraska. TransCanada would supplement that application with an alternative route in Nebraska as soon as that route is selected.
The company also informed the DOS that what had been the Cushing to U.S. Gulf Coast portion of the Keystone XL Project has its own independent value to the marketplace and will be constructed as a stand-alone Gulf Coast Project, not part of the Presidential Permit process. The approximate cost is US$2.3 billion and subject to regulatory approvals. TransCanada anticipates the Gulf Coast Project to be in service in mid to late 2013.
"Our application will include the already reviewed route in Montana and South Dakota," said Russ Girling, TransCanada’s president and chief executive officer. "The over three year environmental review for Keystone XL completed last summer was the most comprehensive process ever for a cross border pipeline. Based on that work, we would expect our cross border permit should be processed expeditiously and a decision made once a new route in Nebraska is determined."
TransCanada will continue to work collaboratively with the State of Nebraska on determining an alternative route for Keystone XL that avoids the Sandhills. TransCanada has been working on assessing the routing in Nebraska since November 2011, following the State Department’s notice to delay a decision on a Presidential Permit until an adjusted route that avoids the Sandhills was developed.
According to TransCanada, U.S. crude oil production has been growing significantly in States such as Oklahoma, Texas, North Dakota and Montana. Producers do not have access to enough pipeline capacity to move this production to the large refining market at the U.S. Gulf Coast. The Gulf Coast Project will address this constraint.
"The Gulf Coast Project will transport growing supplies of U.S. crude oil to meet refinery demand in Texas," added Girling. "Gulf Coast refineries can then access lower cost domestic production and avoid paying a premium to foreign oil producers. This would reduce the United States’ dependence on foreign crude and allow Americans to use more of the crude oil produced in their own country."
Reapplying for the Keystone XL permit is supported by words used in President Obama’s statement January 18, 2012 when he said the denial of the permit was not based on the merits of the pipeline but rather on an imposed 60-day legislative timeline to make a decision on the project.
With respect to moving forward on an initiative like the Gulf Coast Project, President Obama stated: "In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security - including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico."
The U.S. manufacturing sector would continue to experience the economic benefits of the project, as TransCanada has contracts with over 50 suppliers across in the U.S. Manufacturing locations for our equipment include: Texas, Missouri, Pennsylvania, Michigan, Oklahoma, South Carolina, Indiana, Georgia, Maryland, New York, Louisiana, Oklahoma, Minnesota, Ohio, Arkansas, Kansas and California. There are hundreds of additional suppliers sub-contracted through our suppliers for our material and equipment.
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