By DAN MURTAUGH & ELIOT CAROOM
CALGARY (Bloomberg) -- TransCanada Corp.
said it expects to finish construction of the southern portion
of the Keystone XL pipeline network by the end of October.
TransCanada will begin filling its Gulf Coast pipeline with
oil shortly after that, a process thats forecast to take
30 days, Les Cherwenuk, project director for the company,
said in an interview after a speech at Hart Energys
Executive Energy Club in Houston. He declined to discuss the
grades of crude that will be moved via the pipeline, though
said that filling it would be easier with light, or low-density
The Gulf Coast pipeline to Nederland, Texas, from Cushing,
Oklahoma, is likely to speed the flow of crude out of Cushing.
Cushing supplies fell to 32.8 MMbbl last week, the lowest level
since February 2012, the government reported. They are down 34
% since June 28 and reached a record 51.9 MMbbl January 11.
Its positive for TI because there were lots of
rumors going around that this could get delayed, said
Amrita Sen, chief oil analyst for Energy Aspects Ltd. in
London. That was one of the biggest factors weakening
$2.3 billion project
Building the 700,000 bpd Gulf Coast line will cost $2.3
billion, TransCanada has said. It has been under construction since August 2012.
After the lines initial capacity is reached, it will be
able to expand capacity to 830,000 bpd, according to the
Construction was split into three
sections. The middle portion is already finished and the
southern part should be complete in the next week, Cherwenuk
said. The northernmost portion, originating at Cushing, and a
terminal at Cushing, still need to be completed, he said.
The pipeline was originally part of TransCanadas
Keystone XL project, which entered its sixth year of United
States review last month. President Barack Obama initially
rejected the conduit in January 2012, citing concerns with its
path through ecologically sensitive lands in Nebraska.
TransCanada reapplied with a new Nebraska route last year
and split the project in two, proceeding with the Gulf Coast project, the southern portion of the
network that doesnt require a permit.
Cherwenuk declined to speculate on when the company expects
another decision on the northern pipeline. He said the State
Department is poring over thousands of public comments and
trying to address them all in an environmental impact statement.
TransCanada has agreements to ship about 100,000 bpd from
the Bakken shale formation in North Dakota on the northern expansion.
TransCanada hasnt decided what to do if the State
Department approval doesnt come through, Cherwenuk said.
Building just the portion between North Dakota and Nebraska
while awaiting approval doesnt make sense because there
wouldnt be enough shipments to justify a line of the size
planned, he said.
If something were to occur, then you build a smaller
pipeline, but at this point in time, just building Keystone XL
based on Bakken contract supplies is not attractive, he