No quitting Keystone
TransCanada is plunging on in its efforts to ship more Canadian crude to the U.S. Gulf Coast despite the rejection of Keystone XL.
Paul Miller, president of the company’s liquids pipelines, said more capacity is due on stream by mid-year through TransCanada’s US$600 million Houston Lateral pipeline and tank terminal, connecting the existing first phase of Keystone to refineries in Houston.
He said that currently TransCanada delivers about one-third of the 300,000 barrels per day of crude from Canada to the Gulf Coast and the new connection will increase both the share and the absolute volumes moved by his company.
To boost shipments on the Houston Lateral, TransCanada and Magellan Midstream Partners are building a US$50 million link to ship 200,000 bpd from TransCanada’s nearly completed Houston terminal to Magellan’s East Houston terminal.
Miller said the connection is “hugely significant from a connectivity perspective” by establishing new delivery points at Houston and Texas City refineries.
Plans for other small projects through acquisitions or greenfield developments are also in the works for the Gulf Coast, he said.
In addition, TransCanada hopes to extend its existing footprint into Louisiana, Miller said.
Keystone XL vitalBut Chief Executive Officer Russ Girling, speaking to an investor conference in British Columbia, left no doubt that Keystone XL remains a vital option in the company’s C$14.5 billion expansion program.
He said that in filing a US$15 billion claim under the North American Free Trade Agreement and a lawsuit against the Obama administration, TransCanada was undeterred by the knowledge that there has never been a successful legal action against the United States under NAFTA.
“It’s pretty clear we have been harmed in an arbitrary and discriminatory way,” he said.
Girling said nobody would dispute that the U.S. rejection of the pipeline is not an “egregious abuse of authority and that we were not treated fairly or equitably to whatever standards you choose - cross-border pipelines, domestic pipelines, or imports from other countries.”
“There’s been nothing quite like this decision (which has not been) based on the merits of our application.”
Ben Pham, an analyst at BMO Capital Markets, is certain that TransCanada has a “credible case,” although the odds are against the company in a process that could take years to resolve.
- GARY PARK