TransCanada Corp. plans to continue to pursue various routes for the spurned Keystone XL oil pipeline project, and shippers holding long-term firm contracts equating to 850,000 b/d also plan to stick with the C$7 billion, 1,700-mile pipeline project, CEO Russ Girling said Thursday.

The shippers’ continuing interest is evidence “that this project is very much needed,” said Girling, who spoke at the CIBC World Markets’ 2012 Whistler (BC) Institutional Investors Conference. His comments came one day after the Obama administration denied a presidential permit for Keystone. The U.S. State Department denial does not preclude a refiling, and TransCanada immediately began that process.

“The overwhelming energy security, economic and job-creation benefits of this project also clearly indicate that this project is in the national interest of the United States. Those [criteria] were not the reasons for denial of the permit, and therefore, I believe, it will ultimately be approved,” Girling said.

The entire list of shippers for the project has not yet been made public, but sources at TransCanada have said that among the group are units of ConocoPhillips, Valero Energy Corp. and Marathon Oil Co.

Girling was asked about the project’s contracts with shippers and whether they were less secure as a result of the U.S. setback but he reiterated that producers and refiners who have signed deals are still contractually committed to the project.

“All these shippers look at all of their alternatives and determine which ones will achieve their needs,” said Girling. All the major permitting and pre-construction work on Keystone XL is “pretty much done,” with most of the environmental work and all the rights-of-way, engineering and land procurement essentially complete. “Of all the alternatives, I would say that our project is still the farthest along in the process.

“When the shippers would no longer be able to support the project, TransCanada would no longer pursue it. At the current time, all the shippers are indicating the project is still very important to them. The project hasn’t been denied on its merits; it was clearly a process issue [too short a timeline imposed by Congress], so our intent is to make adjustments, get back in the process and get this thing done.”

Girling indicated that the pipeline company is close to an agreement with Nebraska officials on an alternate route that would avoid the state’s environmentally sensitive Sandhills area. Once that agreement is in place a public process would begin that could take another six months.

“The only outstanding issue [in the overall project environmental review] is with Nebraska,” he said, noting that he doesn’t think a new environmental review needs to be done. “Over the last six to eight weeks we have met with the Nebraska Department of Environmental Quality and discussed various corridors that would go around the sensitive areas, and we are coming very close to a decision as to which corridor would be the best. We’re taking our lead from them as to what is ‘best.'”

Girling reiterated that even with the added environmental work on the alternate route through Nebraska, he thinks a first quarter 2013 target for a new State Department determination is achievable. He also held out the possibility that TransCanada may build the project in segments (Bakken Shale link to Cushing, OK; Cushing to Texas; and the Houston lateral), “if that is what the company and the shippers ultimately believe is the right thing to do.”

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