TransCanada Corporation (NYSE:TRP) (TSX:TRP) launched a binding open season to obtain firm commitments from interested parties for the Keystone Pipeline System to transport crude oil from Hardisty, Alberta to Houston, Texas.
The proposed Keystone Houston Lateral would involve an expansion of capacity and construction of an approximate 80 kilometer (48 mile) pipeline extension from the proposed Keystone XL system to the Houston refining center. The proposed facilities would double the U.S. Gulf Coast refining market capacity accessible from the Keystone Pipeline System to over four million barrels per day by providing access to the key refining market in the Houston area.
"The extension of the Keystone Pipeline System would provide direct access to the Houston refining market and further enhance the connection of a secure, growing and reliable supply of Canadian crude oil and domestic U.S. crude oil from the Williston basin and Cushing through Keystone Marketlink with the largest refining market in North America," said Russ Girling, TransCanada president and chief executive officer. "The addition of a Houston lateral would increase the markets accessible from the Keystone Pipeline System and provide additional flexibility to our shippers."
Following the completion of the open season, which closes at 12 p.m. (Mountain) on October 17, 2011 and subject to receipt of sufficient contractual commitments from shippers, TransCanada intends to proceed with the necessary Canadian regulatory applications for approvals to construct and operate the facilities required for the capacity expansion and provide transportation services from Hardisty to Houston. The Keystone Houston Lateral and capacity expansion are included in the original scope of the Keystone XL U.S. Presidential Permit application process, which is expected to conclude by the end of 2011. Subject to the receipt of the Keystone XL Presidential Permit, transportation service to Houston on the Keystone Pipeline System is expected to begin in 2014.
Keystone XL is a proposed 1,700 mile pipeline that would expand the existing Keystone system and deliver crude oil to refineries in the U.S. Midwest and the Gulf Coast. Keystone would increase U.S. energy security by providing Americans with a stable, secure supply of U.S. domestic and Canadian oil versus continuing to import unstable, higher priced crude from the Middle East and Venezuela. Keystone would create 20,000 American jobs during construction, inject $20 billion into the U.S. economy and pay over $5 billion in property taxes over the lifetime of the project.
TransCanada launches open season for Keystone Pipeline extension to Houston