The NEB found the proposed pipeline to be in the public interest and accepted that the project will connect a large, long term and strategic market for Western Canadian crude oil with the US Gulf Coast in a manner that will bring economic and other benefits to Canadians.
Hal Kvisle, president and CEO of TransCanada, said: “We are pleased the National Energy Board has approved our Keystone expansion. This is another significant milestone in advancing the project.
“Keystone will be the first pipeline to directly connect a growing and reliable supply of Canadian crude oil to the largest refining market in North America. Our shippers have committed crude oil that amounts to 75% of the expansion capacity for an average term of 17 years reflecting the value the project has to the overall market.”
When completed, the expansion will increase the capacity of the Keystone pipeline system from 590,000 barrels per day to approximately 1.1 million barrels per day. The $12bn system is 83% subscribed with long-term commitments of 910,000 barrels per day for an average term of approximately 18 years.
The Keystone expansion is a 3,200km and 36-inch crude oil pipeline stretching from Hardisty, Alberta and moving southeast through Saskatchewan, Montana, South Dakota and Nebraska. It will link up with a portion of the Keystone pipeline that will be built through Kansas to Cushing, Oklahoma.
The pipeline will then continue on through Oklahoma to a delivery point near existing terminals in Nederland, Texas to serve the Port Arthur, Texas marketplace.
Applications for US regulatory approvals are proceeding and decisions are anticipated during the fourth quarter of 2010. Construction is expected to begin in the first quarter of 2011 and the company expects deliveries of crude oil to the US Gulf Coast to begin in the first quarter of 2013.
