Keystone is doable even with new route, TransCanada CEO says

By Kevin Orland on 1/26/2018

CALGARY (Bloomberg) -- Keystone XL is feasible, though a touch more costly, even after Nebraska regulators imposed an alternative route.

That’s the message from TransCanada Corp.’s CEO in the latest hint the company is leaning toward building the pipeline that will ship more crude from the oil sands to refineries in the Gulf of Mexico. It doesn’t mean the Calgary-based pipeline giant has made a decision. TransCanada’s evaluation after the ruling to allow the alternate route was mostly about its legality, he said.

“We’re comfortable that they came to a decision that was within their jurisdiction and within the law,” CEO Russ Girling said in response to questions during a presentation at a Canadian Imperial Bank of Commerce conference in Whistler, British Columbia. “That was what our primary concern was.”

The alternate route doesn’t present major issues for construction, Girling said. The additional cost will be about $80 million to $160 million, and it will add five to 10 mi of pipe, he said. That’s a small addition to an $8 billion, 1,200-mi project.

“The actual routing, construction and costs, those aren’t major issues,” he said.

TransCanada will now focus on acquiring land along the new path and obtaining the other permits it needs, he said. The company still hasn’t made an official decision on whether to build the project, he added.

The shares pared losses after his comment, closing 2.6% lower at C$57.72 in Toronto on Thursday, after slumping as much as 2.8%.

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