TransCanada Corp. (TRP) Chief Executive Russ Girling said Wednesday the Keystone XL pipeline is still the best alternative to bring Canadian crude to the U.S. Gulf coast despite a delay and a re-route imposed by the U.S. government last week.
TransCanada Corp. (TRP) Chief Executive Russ Girling said Wednesday the
Keystone XL pipeline is still the best alternative to bring Canadian crude to
the U.S. Gulf coast despite a delay and a re-route imposed by the
U.S.
government last week.
However, the delay will increase the competition Keystone XL faces from other
pipeline companies proposing other routes to move crude oil from the key
U.S.
storage hub in
Cushing
,
Okla.
to
Texas
refineries, Girling said. Earlier Wednesday, Enbridge Inc., (ENB) another
Canadian pipeline company, appeared to take the upper hand in the race to
provide new capacity out of Cushing. The company said it had agreed to buy into
the Seaway pipeline system, and reverse the direction, so oil could go from
Cushing to the
Gulf
Coast
.
U.S.
benchmark crude jumped on the news, suggesting the Enbridge move--which could
come as early as next year--could ease a bottleneck in the
Midwest
that
has depressed
U.S.
prices.
Still, Girling said Keystone's shippers remain supportive of Keystone XL, due
to its progress through planning and regulation.
Many of the materials and contracts to build the $7 billion pipeline are in
place and ready to be put to use as soon as TransCanada gets final approval
from the U.S. State Department, he said.
On Monday, TransCanada reached an agreement with
Nebraska
officials to move the route of the Keystone XL pipeline away from an
environmentally sensitive aquifer in the Sand Hills region, which may speed the
pipeline's eventual approval. The State Department, charged with reviewing
cross-border pipelines, has said the review of the new route would take another
12 to 18 months, pushing Keystone's completion into 2014.
Other projects competing with Keystone XL include a joint venture between
Enterprise Products Partners L.P. (EPD) and Enbridge to build the 500-mile
Wrangler pipeline, connecting Cushing to
Houston
. On
Wednesday, Enbridge said it would pay $1.15 billion to buy a 50% stake in the
Seaway pipeline from ConocoPhillips (COP) and reverse its flow. Enterprise
Products owns the other 50% and is the line's operator.
Girling said he remained confident Keystone XL would be approved.
"The Keystone XL project in our view means way too much to the
U.S.
economy, the Canadian economy,
U.S.
energy security, and
U.S.
national security not to be approved," he said. TransCanada estimates the
$7 billion, 1,700-mile pipeline will create 20,000 jobs and $20 billion in
economic stimulus to the
U.S.
economy. After an expansion, it would ship up to 830,000 barrels a day or a
third of all imports from
Canada
, the
U.S.
's
largest crude oil supplier.
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