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LINCOLN — The Keystone XL pipeline will carry more oil, be more expensive to build and won't completed until 2015, developer TransCanada Inc. indicated this week.
The company's fourth-quarter report, released Tuesday, indicates that it will spend an additional $600 million to increase the capacity of the Keystone XL to 830,000 barrels of oil a day and add a 50-mile lateral pipeline to serve refineries in Houston.
The entire 1,700-mile-long project is not projected to be completed until early 2015, TransCanada's report indicated, which would anticipate U.S. approval of the project sometime in early 2013.
The increased capacity will require construction of more pumping stations, a company spokesman said, which will contribute to a higher estimated cost for project: $7.6 billion.
President Obama in January rejected a federal permit for the Keystone XL, saying federal regulators could not meet a February deadline imposed by Congress to make a decision.
At the time, the president said his decision was not based on the merits of the pipeline but on the arbitrary deadline. Obama urged the company to reapply after it found an acceptable new pipeline route around Nebraska's fragile Sand Hills region, but he said it would take until early 2013 to rule on a new application.
TransCanada's report Tuesday would appear to be an acknowledgement that congressional efforts to bypass Obama and approve the pipeline sooner will fail and that TransCanada will have to wait until 2013 to obtain a permit.
The 36-inch pipeline had been projected to pump 700,000 barrels a day when it began operation. But the company's application for a federal permit has said it had plans to increase the volume eventually to 830,000.
Coupled with the existing Keystone pipeline, the expansion would allow 1.4 million barrels of oil a day to flow from the tar sand regions of Alberta to the U.S. Gulf Coast.
A TransCanada press release indicated that shippers showed increased interest in the pipeline project in December, leading to the plan for increased capacity and the lateral pipeline to Houston. The company said it has now secured long-term firm contracts in excess of 1.1 million barrels per day.
"This significant demand and additional long-term customer commitments confirm the continued strong shipper support of TransCanada and the need for Keystone XL to move forward," said Russ Girling, TransCanada's president and chief executive officer.
Company spokesman Shawn Howard said Wednesday that the company is still considering whether to build some segments of the Keystone XL line sooner, before 2013. One key segment would be from a pipeline terminal at Cushing, Okla., to refineries on the Gulf Coast.
"We haven't ruled anything out," Howard said. "Ultimately, that will be a decision we will make with our shippers."
Other pipeline companies have offered alternatives to relieve a glut of oil at the Oklahoma terminal, which has caused Canadian oil to be sold at $10 to $19 less per barrel.
Contact the writer:
402-473-9584, paul.hammel@owh.com
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