Keystone XL price now at $8B US, TransCanada says
Costs rise after 7-year delay in getting approval for pipeline to move oilsands crude
The price tag for the controversial Keystone XL pipeline has risen by half to $8 billion US, TransCanada Corp. said Tuesday as the U.S. regulatory process drags into its seventh year.
In its regulatory filing to the U.S. State Department, TransCanada had pegged the cost of Keystone XL at $5.4 billion US, but has long signalled that the longer it's forced to wait for a permit, the more expensive the pipeline would become. As of Sept. 30, TransCanada had sunk $2.4 billion into the project.
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Much of the opposition to the pipeline has centred on what substance it would carry: oilsands crude. Environmentalists have argued that if U.S. President Barack Obama rejects the pipeline, he would demonstrate his green credentials and commitment to fighting climate change. There are also concerns based on how a potential spill may affect water and agricultural land in the Plains states.
The opportunities for Keystone appear to be diminishing as oil producers find oil-by-rail or other alternative routes to market.
Today, Marathon Petroleum Corp. said it is a potential reversal of a major U.S. pipeline between Illinois and the Louisiana Gulf Coast, where there is significant refinery capacity.
Marathon, BP PLC and Plains All American LP are assessing “potential commercial opportunities” for reversin the Capline pipeline system to move oil from the North Dakota shale patch and Alberta oilsands to Louisiana.
Nova gas pipeline
Earlier Tuesday, TransCanada said it's planning to expand its Nova natural gas pipeline system by 2017 at a cost of $2.7 billion.
The pipeline carries about three-quarters of the gas produced in the Western Canada Sedimentary Basin, but TransCanada says demand for capacity has increased.
The Calgary-based company says it plans multiple projects so it can also carry more gas from unconventional sources in northwest Alberta and northeast British Columbia to markets in Canada and the United States.
TransCanada will require regulatory approval and says it plans to file applications for various parts of the project with the National Energy Board between now and the third quarter of 2015.
It's aiming to begin construction in 2016 and have all the changes in service by the second quarter of 2017.
Canadian Mainline pipeline
The company also announced it will take the next step in updating its natural gas infrastructure in southern Ontario in the Toronto and Hamilton areas.
The pipeline and facility expansions within the so-called Eastern Triangle portion of TransCanada's Canadian Mainline system are expected to cost about $475 million.
The company made the announcements shortly before it reported a third-quarter profit of $457 million or 64 cents per share on $2.45 billion in revenue. That compared with a profit of $481 million or 68 cents per share on $2.20 billion in revenue a year ago.
On a comparable basis, the company said it earned $450 million or 63 cents per share for its latest quarter, up from $447 million or 63 cents per share a year ago.
Analysts had expected an adjusted profit of 61 cents per share, according to Thomson Reuters.
Last week, TransCanada filed a regulatory application for its $12-billion Energy East crude pipeline, which would connect Alberta crude to refineries and export terminals in Quebec and New Brunswick. It would be one of the biggest infrastructure projects in Canadian history, spanning 4,500 kilometres and carrying more than one million barrels of crude per day.
With files from CBC News