TransCanada proposes $1.7B US oil pipeline from Alberta to Illinois
TransCanada Corp. has announced plans to build a $1.7 billion US pipeline to carry heavy oil from central Alberta to southern Illinois.
The proposed Keystone pipeline would be about 3,000 kilometres long. About 40 per cent of the pipeline would come from the conversion of one of TransCanada's existing natural gas pipelines in the prairies to transport oil.
The rest would require the building of a new pipeline south from Winnipeg into North Dakota, South Dakota, Iowa, Missouri and Illinois.
"TransCanada is in the business of connecting energy supplies to markets and we view this opportunity as another way of providing a valuable service to our customers," said TransCanada's CEO Hal Kvisle.
Kvisle said the conversion of a natural gas pipeline was the most cost-competitive way of accommodating the anticipated growth in Canadian crude shipments over the next 10 years.
The Keystone project, which would require regulatory approval, proposes to pump 400,000 barrels a day of heavy crude from the oil hub of Hardisty, Alta., to Patoka, Ill.
TransCanada (TSX:TRP) said it has already received support for the project from "a number of producers and refiners."
The rush to carry oilsands production from northern Alberta to markets around the world is clearly gearing up.
Last week, the pipeline arm of Terasen Inc. said it was going to increase its oil pipeline capacity between Edmonton and Burnaby, B.C., by a third â a $570-million expansion.
- FROM Jan. 31, 2005: Terasen to raise oil pipeline capacity to West Coast
The company said increased West Coast and offshore demand for production from Alberta's oil sands would justify the expansion.
- FROM Dec. 12, 2004: Enbridge eyes $2.5 billion pipeline deal for 2005
In December, Enbridge revealed it was hoping to build a $2.5 billion pipeline to carry oil between northern Alberta and Prince Rupert or Kitimat in northwestern British Columbia.
TransCanada shares were up 6 cents at $30.06 on the TSX.