TransCanada CEO says shippers being polled for support of Keystone XL

TransCanada consulting Keystone XL shippers

WHISTLER, B.C. — The CEO of TransCanada Corp. (TSX:TRP) says the company will be talking with shippers to determine if they still support the Keystone XL pipeline project after it was given a new lease on life by U.S. President Donald Trump earlier this week.

In his first comments since Trump invited the company to reapply to build the conduit to bring Canadian oil to the U.S. Gulf Coast, Russ Girling said he thinks the economic case for it can still be made.

“I believe this still makes sense but we haven’t engaged in direct conversation (with shippers) on that issue,” he said during a webcast presentation from a CIBC Capital Markets investor conference in Whistler, B.C. on Wednesday.

“I can tell you this wasn’t in our planning horizon in the middle of last year so we’ve only just re-engaged with our shippers again.”

He added he expects access to the “biggest heavy oil refining market in the world in the U.S. Gulf Coast” will remain attractive for TransCanada’s customers.

The $8-billion Keystone XL project would move oil 1,900 kilometres through a 36-inch-diameter crude oil pipeline beginning in Hardisty, Alta., and extending south to Steele City, Neb., where it would link with other lines already leading to refineries along the Gulf Coast.

TransCanada said in a statement on Tuesday it was preparing its application for a presidential permit after Trump endorsed the project.

Trump directed the State Department and other agencies to make a decision within 60 days of a final application and declared that a 2014 State Department environmental study satisfies required reviews under environmental and endangered species laws.

Miles Pittman, a partner in the energy group for Calgary law firm Borden Ladner Gervais, said the pipeline must still obtain a permit for construction through Nebraska.

“Assuming that regulatory hurdle can be overcome, it becomes a question now of economics for TransCanada and whether or not the pipeline can be shown to generate the kind of returns that TransCanada would expect,” he said.

He pointed out that Keystone XL made economic sense when it was proposed in 2008 but crude oil markets have changed since then.

In a note to investors, RBC Dominion Securities analyst Robert Kwan said Nebraska permits could take seven to 12 months to obtain, suggesting construction would be delayed until 2018, putting the pipeline in service by late 2019 or early 2020.

He said unknowns include Trump’s demands for better terms from the company, changes in capital costs, changes in contracting and whether there will be any court challenges.

Girling said he thinks the economic benefits of spending $8 billion on the line will be sufficient to win support.

TransCanada still faces bitter opposition from environmentalists, landowners and native Americans who are determined to block Keystone XL.

Former president Barack Obama rejected Keystone XL in late 2015, declaring it would undercut U.S. efforts to clinch a global climate change deal that was a centrepiece of his environmental agenda.

In response, TransCanada filed notice to launch a $15-billion claim under the North American Free Trade Agreement. It also filed a lawsuit in the U.S. Federal Court in Texas alleging that Obama exceeded his power under the U.S. Constitution by denying construction of the project.


Follow @HealingSlowly on Twitter.


Dan Healing, The Canadian Press

Just Posted

Langley Rotarians work for clinics in Kenya

Local Rotary Clubs are asking locals to think of others at Christmastime.

Looking Back: Dec. 14, 2017

The community’s history as recorded in the files of the Langley Advance

Throwback Thursday: December 14, 2017

Can you help us caption a photo from Langley’s past?

Giants invite fans to toss teddy bears at Langley game

The annual Teddy Bear Toss takes place at this Sunday’s home game in the LEC.

Langley Christmas Fun: a listing of holiday events, Dec. 14, 2017 edition

Langley events: or (subject: Christmas Fun).

VIDEO: Carollers bring festive sounds to Langley City most Fridays

Shoppers will once again be entertained by choirs, musicians and bands this month in McBurney Plaza.

Debt-to-household-income ratio rises in third quarter

Total household credit market debt grew to $2.11 trillion in the third quarter

B.C. Mountie told to resign after texting teenage sex assault victim

RCMP documents say Const. Brian Eden sent sexually inappropriate photos to 17-year-old girl

Family doctors should learn to treat addiction, not shun patients: scientist

B.C. Centre on Substance Use’s Dr. Evan Wood said efforts underway to change addiction medicine image

Update: Small fire near Maple Ridge tent city

Occurred outside camp Wednesday night

Four dog deaths investigated in Cranbrook

One vet suggests a parallel to these deaths and similar ones in 2016

Meningococcal disease outbreak declared in Okanagan

Five cases in last six months among 15- to 19-year-olds, including one in Vernon

Military life gives way to chance as author

Retired Chilliwack officer pens book about life in Afghanistan

Province rejects Ajax mine in Kamloops

KGHM Ajax had proposed a 1,700-hectare open-pit copper and gold mine, just southwest of Kamloops

Most Read