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UPDATE 1-CERAWEEK-Keystone XL pipeline will be built, TransCanada CEO predicts

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HOUSTON, March 4 (Reuters) - The controversial Keystone XL pipeline will receive President Obama's blessing and be built to transport crude oil from Canada to Texas, TransCanada Corp Chief Executive Russ Girling predicted on Tuesday.

Girling's confidence helps project a sense of inevitability around the $5.4 billion project, which supporters say would create badly needed jobs, and offset a recent unfavorable Nebraska court ruling and more than five years of political wrangling in Washington.

"It is the next pipeline that is going to be built" in the United States, Girling said in an interview at the IHS CERAWeek energy conference in Houston. "The marketplace continues to push us to build a pipeline. It's the right thing to do."

Girling sought to reassure many of the Canadian company's customers attending the conference, the largest gathering of energy companies in the world, that Keystone XL ultimately would open and be able to transport their crude oil to Texas refineries.

The project has become a lightning rod for opposition, with environmentalists saying oil spills would become common along the Keystone XL extension and warning that the project could hasten climate change.

Still, the U.S. State Department issued a report in January that downplayed environmental concerns surrounding Keystone XL, rankling opponents and buoying supporters of the project.

President Obama told governors last month that he expects to make a decision on whether to approve TransCanada's Keystone plans in the next few months, a step that would end the long-running saga.

"There's no reason in my mind why it can't come to a conclusion," Girling said.

The project hit a snag last month when a Nebraska judge ruled the state's governor lacked authority to approve part of the project. Girling said he believes the ruling is a "solvable problem" and wouldn't affect Obama's process for reaching a final decision on Keystone XL.

The Keystone pipeline network was designed in four phases, three of which have been built already, and TransCanada began shipping Canadian crude oil to Texas in January.

The Keystone XL portion of the network, roughly 800 miles through Montana, South Dakota and Nebraska, would increase capacity and allow Bakken crude oil from North Dakota and Montana to be shipped on the network.

TransCanada also would be open to building oil-loading hubs for rail networks, depending on customer needs, Girling said. Rival Enbridge has built its own network of rail hubs to service areas with limited pipeline capacity.

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