The expansion is expected to cost approximately $7 billion. When completed, the expansion will increase the commercial design of the Keystone Pipeline system from 590,000 barrels per day to approximately 1.1 million barrels per day and result in a total capital investment of approximately $12.2 billion.
According to the company, plans to expand to the US Gulf Coast follow successful negotiations with several prospective shippers who have agreed, subject to regulatory approvals, to make shipping commitments of approximately 300,000 barrels per day to the US Gulf Coast for an average term of 18 years during a binding open season.
In addition, prospective shippers have also agreed to commit another 35,000 barrels per day to Wood River and Patoka, Illinois during a future open season expected in the third or fourth quarter of 2008.
The Keystone expansion includes an approximate 3,200-kilometer, 36-inch crude oil pipeline starting at Hardisty, Alberta and extending south to a delivery point near existing terminals in Port Arthur, Texas and, subject to shipper support, will include an additional approximate 80 kilometer pipeline lateral to the Houston, Texas area.
With the addition of incremental pumping facilities, the Keystone Pipeline system could be further expanded from 1.1 million barrels per day to 1.5 million barrels per day.
TransCanada is responsible for developing, constructing and operating the Keystone pipeline and has initiated outreach activities with key stakeholders including local communities and landowners along the expansion route. It is expected that deliveries to Wood River and Patoka, Illinois will commence in late 2009. Deliveries to Cushing, Oklahoma are expected to commence in late 2010 and deliveries to the US Gulf Coast are expected to begin in 2012.
