TransCanada: oil shipments on southern Keystone XL leg to begin Jan. 22

Lauren Krugel, The Canadian Press 0

CALGARY – The southern portion of TransCanada Corp.’s Keystone XL pipeline is nearing startup, with oil shipments between Cushing, Okla., and Gulf Coast refineries expected to begin on Jan 22.

TransCanada began filling the US$2.3-billion line just over a week ago. In the coming weeks, some three million barrels of crude will be injected into the system.

“It’s a continuous process of filling and testing and filling and testing, but at this point in time we haven’t seen any sort of major issues or anything like that. It’s gone very well,” CEO Russ Girling said in an interview Tuesday.

TransCanada has gone through this process twice before — first, when its base Keystone system began delivering crude to the U.S. Midwest and then in February 2011 when the line was extended to Cushing, Okla., which is home to a huge oil storage hub.

“You learn as you go. We’re getting better at these things,” said Girling.

Once the line fill is complete, it’s a matter of commissioning pump stations, meters and other equipment on the line, which will have initial capacity of 700,000 barrels a day.

The project is expected to add $250 million to TransCanada’s earnings before interest, taxes, depreciation and amortization in 2014, Girling said.

TransCanada is still awaiting approval from the Obama administration to construct the US$5.4-billion northern portion of Keystone XL more than five years after it applied for a permit.

Girling said Tuesday that he’s optimistic there will be a decision in the first quarter of 2014.

The company was able to move ahead with the Gulf Coast portion first because it doesn’t cross the Canada-U.S. border.

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