Canada oil pipeline into US gets extension support

Posted Dec. 15, 2011, at 9:29 p.m.
Last modified Dec. 23, 2011, at 9 p.m.

CALGARY, Alberta — TransCanada Corp. said Thursday that it has received customer support to undertake an extension of its stalled Canada-to-Texas Keystone XL oil pipeline pending regulatory approval in the U.S.

Russ Girling, TransCanada’s president and chief executive officer, said in a statement that the potential 50-mile expansion of the Keystone XL pipeline would increase the capacity of the pipeline to 830,000 barrels per day from 700,000 barrels.

Instead of ending in Port Arthur, Texas, the pipeline will reach into the Houston market, known as the Houston Lateral, as well. That will more than double the U.S. Gulf Coast refining market capacity the pipeline can access if it’s approved.

“This significant demand and additional long-term customer commitments confirm the continued strong shipper support of TransCanada and the need for Keystone XL to move forward,” said Girling.

“Proceeding with the extension of the Keystone XL system to Houston and increasing capacity on the pipeline system will further enhance the connection of a secure, growing and reliable supply of Canadian crude oil and domestic U.S. crude oil with the largest refining market in North America, while providing additional flexibility to our shippers,” he added.

The Houston Lateral is within the original scope of the regulatory process that is currently under way, TransCanada said.

The U.S. State Department was originally set to announce its final decision by year-end, but in November said more time was needed to weigh a new route for the pipeline to take through Nebraska, in order to avoid environmentally sensitive areas.

The pipeline would carry oil from western Canada to refineries in Texas, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma and Houston if the expansion is approved.

Montana state officials on Thursday announced environmental approval for the pipeline.

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