Canada-US pipeline expansion approved

Canada's National Energy Board (NEB) has approved an application from TransCanada Corporation to construct and operate the Keystone XL Pipeline Project, an expansion of its Keystone pipeline to the US Gulf Coast.  The $1.7 billion project will transport crude oil from Hardisty, Alberta to the Canada/US border at Monchy, Saskatchewan. The NEB said Keystone will be the first pipeline to directly connect Canadian crude oil to the largest refining market in North America.  The Keystone pipeline currently stretches from Hardisty to refining hubs in Illinois. Construction on the expansion is expected to begin at the start of next year, with deliveries of crude oil to the US Gulf Coast expected from the first quarter of 2013.  Starting out from Hardisty, the pipeline will move south-east through Saskatchewan, Montana, South Dakota and Nebraska, before linking up with a portion of the Keystone Pipeline that will be built through Kansas to Cushing, Oklahoma.┬áThe pipeline will then continue through Oklahoma to a delivery point near existing terminals in Nederland, Texas to serve Port Arthur.  The Canadian end of the project will involve the construction and operation of around 529 kilometers of new pipeline and related facilities.  The pipeline will have an initial capacity of approximately 700,000 barrels per day and will be expandable to 900,000 barrels per day.  The deal will also see TransCanada operating the proposed tolls for the pipeline once it becomes operational.  Commenting on the announcement, Hal Kvisle, TransCanadaÔÇÖs president and CEO, said: ÔÇ£We are pleased the National Energy Board has approved our Keystone expansion.┬áThis is another significant milestone in advancing the project.ÔÇØ  He went on to say: ÔÇ£Our shippers have committed crude oil that amounts to 75 percent of the expansion capacity for an average term of 17 years reflecting the value the project has to the overall market.ÔÇØ  As part of the expansion deal, TransCanada, CanadaÔÇÖs biggest pipeline and power company, will be required to meet 22 conditions related to issues such as safety, environmental protection and landowner rights. The board also imposed an obligation to monitor greenhouse gas emissions.  Applications for US regulatory approvals are proceeding and a decision is expected in the fourth quarter of this year.  The Keystone project forms part of a $22 billion capital program designed to drive significant growth in cash flow and earnings for TransCanada over the next five years.  The companyÔÇÖs network of wholly owned natural gas pipelines extends for more than 60,000 kilometers, tapping into virtually all the major gas supply basins in North America.  TransCanada is one of the continentÔÇÖs largest providers of gas storage and related services, with approximately 380 billion cubic feet of storage capacity. It also owns or has stakes in over 11,700 megawatts of power generation in Canada and the US.