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TransCanada Files Again for Keystone XL Permit

TransCanada Corp. has submitted a presidential permit application to the U.S. Department of State (DOS) for the Keystone XL Pipeline from the U.S.-Canada border in Montana to Steele City, NE. The company said it will supplement that application with an alternative route in Nebraska as soon as that route is selected.

This portion of the Keystone XL project is the only one still needing a presidential permit. The application follows TransCanada's bifurcation of the project after its first pass at a presidential permit for the entire project failed. The Obama administration rejected the entire $7.6 billion project earlier this year on environmental concerns related to an aquifer in Nebraska (see Shale Daily, Jan. 19). Obama has said he supports the project's southern portion.

"The multi-billion dollar Keystone XL pipeline project will reduce the United States' dependence on foreign oil and support job growth by putting thousands of Americans to work," said TransCanada CEO Russ Girling.

Keystone XL would transport U.S. crude from the Bakken Shale supply basin in Montana and North Dakota, along with Canadian oil, to U.S. refineries.

"Our application for a presidential permit builds on more than three years of environmental review already conducted for Keystone XL," Girling said. "It was the most comprehensive process ever for a cross-border pipeline, and that work should allow our cross-border permit to be processed expeditiously and a decision made once a new route in Nebraska is determined."

The application includes a previously reviewed route in Montana and South Dakota. In April, legislation was passed in Nebraska and signed into law that enabled TransCanada to re-engage with Nebraska's Department of Environmental Quality (DEQ), allowing the company to continue to work on an alternative route for Keystone XL that avoids water-sensitive Sandhills area (see Shale Daily, April 23).

Alternative routing corridors and a preferred corridor were submitted to the DEQ April 18. The DEQ will now help determine a specific route and oversee the public comment and review process. Once a route is finalized, it will be submitted as part of the presidential permit application.

TransCanada said it would comply with 57 conditions developed by the Pipeline and Hazardous Materials Safety Administration (PHMSA), including a higher number of remotely controlled shut-off valves, increased pipeline inspections and pipe that is buried deeper in the ground. The final environmental impact statement for the project issued last August said the 57 conditions "would result in a project that would have a degree of safety over any other typically constructed domestic oil pipeline system under current code."

TransCanada said shipper interest in the pipeline project remains strong, with Keystone XL currently having firm, long-term contracts in place to transport in excess of 500,000 b/d of Western Canada Sedimentary Basin crude oil to existing U.S. Gulf Coast refineries.

Bakken Marketlink, which would use facilities that form part of the proposed project, currently has firm, long-term contracts to transport 65,000 b/d of Bakken crude oil from the Williston Basin in North Dakota and Montana, TransCanada said. Keystone XL would have an initial capacity of 830,000 b/d.

TransCanada expects to begin construction of Keystone XL in the first quarter of 2013, with completion slated for late 2014 or early 2015. Construction of the US$2.3 billion Gulf Coast Project (Cushing, OK, to Nederland, TX) is expected to begin this summer, with an in-service date in mid to late 2013 (see Shale Daily, May 1).

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