TransCanada remains optimistic on Keystone XL, but warns thousands of US jobs at risk due to judicial delays

TransCanada remains optimistic on Keystone XL, but warns thousands of US jobs at risk due to judicial delays

A federal judge in Montana has partially approved TransCanada’s request to continue pre-construction activities on its Keystone XL pipeline, including camp construction, discussions with landowners and pipe relocation. The company says some of this work had already been underway for months, as part of its general planning and administrative work.

Earlier this month, a US district court halted construction of the pipeline pending another environmental assessment (EA). The judge ruled that the project's existing EA report was inadequate, ordering another review. TransCanada says the ruling didn't specify whether that applied to pre-construction activities, such as finalizing contracts and purchase agreements.

Last Wednesday, the judge ruled engineering and administrative work can continue, but land surveying and relocation of pipe needs to be deferred until the project is approved.

The US Department of State was set to publish its final supplemental EA sometime in December. The recent ruling in Montana now requires the federal government to take a second look at financial justifications for the pipeline, effects on greenhouse gas emissions and impacts on Native American lands. Those additional reviews would likely push approvals out to the first quarter of next year.

TransCanada had hoped to start construction as early as mid-February. If no work is commenced at that time, the company says it would incur serious financial harm due to the delays, resulting in the loss of about 6,600 jobs south of the border.

The 830,000 bbl/day Keystone XL pipeline would transport crude from Alberta into the US Gulf Coast. The US$8 billion line currently has an estimated in-service date of about 2021, but TransCanada has yet to formally sanction the project. At its recent investor's day meeting in Toronto, the company says it remains committed to Keystone XL, and is open to a joint-venture partner to help finance construction.

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