Russ Girling, president and CEO of TransCanada, addresses shareholders at the company's annual general meeting in Calgary, Alberta April 27, 2012.
Credits: REUTERS/Todd Korol
FORT McMURRAY, Alta. -- Calgary-based TransCanada Corp. announced Wednesday that it has enough customer support to begin construction of a $275-million oil terminal in Hardisty, Alta., 200 kilometres southeast of Edmonton - the starting point for the planned Keystone XL pipeline bound for Texas.
In a statement, TransCanada said that the company has received binding, long-term commitments of more than 500,000 bpd of Alberta crude, allowing the company to expand the pipeline and storage tank infrastructure at the terminal to handle a total of 2.6 million bpd, up from 2 million bpd.
The project is expected to become operational in late 2014. If Keystone XL is granted approval by the U.S. government, oil could be flowing south by early 2015.
"There is overwhelming industry support to transport crude oil safely and reliably to markets across North America," said Russ Girling, TransCanada's CEO and president. "The open season held earlier this year for the Keystone Hardisty Terminal was very successful and confirms strong demand from Western Canadian producers for new infrastructure to allow them to move crude oil into the Keystone system."
The current Keystone system links Alberta's crude oil crude to refineries in Illinois and a storage hub in Cushing, Okla.
Keystone XL would expand the existing line's capacity, extending the pipeline to refineries along the Gulf Coast.
A permit to complete Keystone XL in its entirety was rejected by the Obama administration earlier this year, which argued the government needed more time to evaluate security and environmental concerns.
A major flashpoint for opponents was the line's original planned Nebraska route, which would run through the ecologically sensitive Sand Hills region and the Ogallala Aquifer.
On May 4, TransCanada reapplied for construction of Keystone XL, with a new route that avoids the region.
However, the Obama administration announced that it was supporting the construction of the southern leg of Keystone XL, which would allow an overabundance of crude oil stored in Cushing, Okla., to flow to Texan refineries.