TransCanada is moving forward with the southern leg of its $7 billion Keystone XL oil pipeline, skirting a full-blown U.S. review, and hopes to begin construction by mid-year, the company's President and CEO Russ Girling told “The Kudlow Report” Monday.
The Canadian pipeline and energy company also plans to reapply for a Presidential Permit to run the pipeline from Canada to Nebraska, with only slight changes from its original application.
“Fundamentally it will be exactly the same route as we originally applied for, with the exception of a reroute around the sensitive areas of the sand hills of Nebraska,” Girling said.
Girling expects to use the same environmental review, and notes that the company has already acquired 90 percent of the right-of-way for the route.
President Obama rejected TransCanada’s initial Keystone XL application in January after more than three years of study, saying it needed more environmental review than could be completed before a tight deadline that had been set by Congress.
The southern leg of the pipeline does not require a presidential approval, but TransCanada has to obtain a number of permits, which should take a few months. The portion of the contentious pipeline would run from Cushing, Oklahoma to refineries in Texas. TransCanada wants the $2.3 billion southern leg in service by mid- to late 2013.
Girling also sees an eventual need for a pipeline to the west thanks to an increase in supply. He expects the Canadian oil sands to grow by “two to three million barrels a day over the coming decade or two.” There has also been significant growth in the Williston Basin in the U.S.
“That growth and production is going to require a pipeline to the West Coast, as well as a pipeline south and potentially even a pipeline east,” he said.
That could open up the market to Asia, where there is a growing demand for crude oil.
“They’re very interested in the development of the Canadian oil sands, investing in the Canadian oil sands and investing in the pipeline infrastructure and other required infrastructure to get there.”
Reuters contributed to this report.
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