TransCanada Corporation today announced the proposed Keystone Oil Pipeline project has secured 155,000 barrels per day of additional firm contracts from Hardisty, Alberta to Cushing, Oklahoma with duration averaging 16 years.
The commitments were obtained through the successful completion of a binding Open Season held to support an expansion to 590,000 barrels per day and extension of the pipeline to Cushing, Oklahoma. TransCanada has now secured long term contracts for a total of 495,000 barrels per day with an average duration of 18 years.
The Keystone Pipeline will have an initial nominal capacity to transport approximately 435,000 barrels per day of crude oil from Hardisty, Alberta to U.S. Midwest markets at Wood River and Patoka, Illinois when it enters service in late 2009. The expansion and extension would involve additional pump stations and the construction of a 473-kilometre (294-mile) pipeline from the Nebraska/Kansas border to Cushing, Oklahoma with an in-service date of late 2010. With the Keystone expansion and Cushing extension, the nominal capacity will increase to 590,000 barrels per day.
“This commitment from shippers clearly confirms the value of TransCanada’s Keystone project as a cost-competitive way to link growing oil sands supply to U.S. energy markets,” said TransCanada chief executive officer, Hal Kvisle. “With this support, we expect to move to the next phase of the project, expanding the pipeline to the U.S. Gulf Coast. We plan to market capacity for this next expansion throughout the balance of 2007.”
In February 2007, TransCanada received approval from the National Energy Board (NEB) to transfer a portion of its Canadian Mainline natural gas transmission facilities to Keystone Pipeline subject to the approval of a facilities application to construct and operate Keystone’s Canadian facilities. An NEB public hearing on this application concluded on June 21, 2007. TransCanada has also submitted applications for U.S. regulatory approvals at federal and state levels. Provided that regulatory approvals are received, construction of the 2,969-kilometre (1,845-mile) Keystone Pipeline is expected to begin in early 2008.