E&E: KEYSTONE XL: Gulf Coast access for oil sands set for Jan. 22

Elana Schor, E&E reporter
Published: Tuesday, December 17, 2013

TransCanada Corp. will begin shipping heavy oil sands crude from Alberta to the Gulf Coast — the goal of its Keystone XL pipeline — on Jan. 22, when the controversial project’s President Obama-blessed southern leg begins operation, the company announced today.

Environmentalists rarely offer loud criticism of the Obama administration’s green light for the 485-mile pipeline that TransCanada last year renamed the Gulf Coast Project, locked as they are in a years-long campaign to secure a presidential veto of the 1,179-mile northern leg of KXL. But as the pipeline giant’s CEO affirmed in a Reuters interview today, higher prices for heavy oil along the Gulf Coast mean many shippers will seek to move Canadian crude from the 2010-launched Keystone 1 pipeline, which runs from Alberta to Cushing, Okla., onto KXL’s southern portion, which runs from Cushing to Port Arthur, Texas.

“This is another important milestone for TransCanada, our shippers and the refiners on the U.S. Gulf Coast who have been waiting for this product to arrive,” TransCanada spokesman Shawn Howard wrote to reporters.

The company had said last week that it would not disclose the in-service date for the Gulf Coast Project until crude shipments already had begun, citing the risk of financial market speculators aiming to profit off anticipated time frames for deliveries (Greenwire, Dec. 9).

Despite the practical blow that the southern leg’s opening represents, conservation and safety advocates remain as committed as ever to unraveling TransCanada’s border-crossing permit application for the northern section of KXL. The State Department remains at work on a final environmental review of the $5.4 billion project, widely expected to see release next year given an ongoing inspector general inquiry into conflict-of-interest allegations against the private contractor helming the process.

The Gulf Coast Project’s ultimate capacity is expected to reach 700,000 barrels per day, though initial flows are likely to fall below 600,000 bpd as TransCanada continues to seek shipper commitments to run heavy crude through the line.

Special thanks to Richard Charter

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