TransCanada Corp. received the last of three key permits needed for its 485-mile Gulf Coast Project, an oil pipeline from Cushing, OK, to Nederland, TX, that would help alleviate constraints at Cushing where oil from the burgeoning Bakken Shale has been piling.
The latest permit is from the U.S. Army Corps of Engineers in Fort Worth, TX, and joins Corps permits from Galveston, TX, and Tulsa, OK. “TransCanada is now in a position to start construction of the oil pipeline in the coming weeks,” it said.
The project was originally conceived as part of the company’s controversial Keystone XL project to tap Canadian oil supplies. As the larger Keystone XL project became stymied, TransCanada in February said it would develop the Gulf Coast Project separately, saying it has “its own independent value to the marketplace” (see Shale Daily, Feb. 28).
“The pipeline will transport growing supplies of U.S. crude oil to meet refinery demand in Texas,” TransCanada said. “Gulf Coast refineries will be able to access lower-cost domestic production and avoid paying a premium to foreign oil producers, reducing cost and the United States’ dependence on foreign crude oil.”
The U.S. Department of State is currently reviewing TransCanada’s application for a Presidential Permit to proceed with the 1,179-mile (1,897-km) Keystone XL pipeline from Hardisty, Alberta to Steele City, NE, and is expected to make a decision in the first quarter of 2013. TransCanada also continues to work with the Nebraska Department of Environmental Quality to finalize a route that avoids the environmentally sensitive Sandhills area of Nebraska.
“The Gulf Coast Project and the entire Keystone system will further help the U.S. achieve true energy security,” said TransCanada CEO Russ Girling. “The U.S. Energy Information Administration has forecast the United States will continue to import more than seven million bbl of oil each day into 2035. I continue to believe Americans would prefer to consume their crude oil from domestic producers and from Canada rather than higher-priced oil from countries that do not share American values.”
On Friday TransCanada also reported second quarter results. Excluding an after-tax charge of $37 million, net income for the second quarter was $309 million (44 cents/share) compared to $353 million (50 cents/share) in second quarter of 2011.
“TransCanada’s diverse, high-quality energy infrastructure assets performed well in the second quarter,” Girling said. “While historically high natural gas storage levels and low natural gas and power prices adversely affected certain aspects of our business, the majority of our assets continued to generate stable and predictable earnings and cash flow.”
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