By BEN LEFEBVRE
HOUSTON -- TransCanada Corp. still fully expects to receive
approval for its controversial cross-border Keystone XL
pipeline expansion within the next several
months, a company executive said Thursday.
TransCanada, which has been waiting for White House approval
for the 830,000 barrel-a-day pipeline expansion for years, expects to
receive the necessary permit "by the first half of 2013," Paul
Miller, TransCanada's senior vice president in charge of oil
pipelines, said on the sidelines of the Platts North American
Marketing conference in Houston.
"We anticipate to have this in service by end of 2014 or
beginning of 2015," Mr. Miller said.
The pipeline is meant to ship heavy crude oil from Alberta,
where production is expected to grow to 4.5 million bpd by
the end of the decade. But the project has gained criticism from environmental groups who say it will
spur increased production from Canada's tar sands, an energy
intensive process some groups say will cause an increase in
green house gas emissions.
Mr. Miller spoke about the pipeline after his presentation
at the conference was interrupted by an anti-Keystone protestor
who chained himself to the projector Mr. Miller had been
TransCanada has no interest in building an oil pipeline to
Canada's West Coast, because competitors Enbridge and Kinder
Morgan Energy Partners have already announced projects there, Mr. Miller said.
Instead, TransCanada might convert a natural gas pipeline to
transport Alberta's growing supply of light oil to refiners in
eastern Canada, he added.
"We're talking to refiners today, stakeholders today,
producers today, to see what the market wants," Mr. Miller
The lack of a major pipeline connecting Alberta's growing
oil sands production has pushed local crude prices down.
Western Canadian oil at the end of January was selling at a
nearly $40/bbl discount to its Gulf Coast counterpart Maya.
One thing Mr. Miller did not foresee was Canadian oil
exports out of the Gulf Coast. At least one analyst has
forecast up to 200,000 bpd of Canadian crude could head to
Europe and Asia via the Gulf Coast
by the end of 2014.
"I don't know why a producer would ship to the Gulf Coast
just to bypass 5 million barrels a day of heavy oil refining capacity," Mr. Miller
Mr. Miller said that the company remained confident that the
pipeline expansion would receive approval,
even as some potential buyer's have grown more skeptical. Tom
O'Malley, chief executive for east coast refiner PBF Energy,
earlier this month expressed doubt that Keystone XL would
receive the necessary cross border permits.
Dow Jones Newswires