Keystone is changing U.S.-Canada relationship, TransCanada CEO says

5/13/2014

Keystone is changing U.S.-Canada relationship, TransCanada CEO says

REBECCA PENTY and JEREMY VAN LOON

TORONTO, Ontario (Bloomberg) -- Delays to TransCanada Corp.’s Keystone XL pipeline are changing the nature of Canadian and U.S. relations, CEO Russ Girling said.

“What does the future look like for that trading relationship?” Girling, 51, asked at the Bloomberg Canada Economic Summit in Toronto. “Nobody believes that this doesn’t set a precedent,” he said, referring to the lack of progress in getting approval from the U.S. government for Keystone XL.

TransCanada has about C$36 bn ($33 bn) in projects backed by contracts planned to start up through 2018, including the $5.4 bn Keystone XL line that would link oil-sands output with U.S. Gulf Coast refineries. The Obama administration on April 18 extended the U.S. review of the line while TransCanada’s route in Nebraska faces a legal challenge, adding fresh delays to a project first proposed in 2008.

As Canada’s largest pipeline company by market value after Enbridge Inc., TransCanada got 45% of its revenue in the first quarter from its power business, with 42% coming from natural gas pipelines and the rest from oil conduits.

A legal challenge under the North American Free Trade Agreement isn’t the company’s “primary tack” right now, Girling said.

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