Energy infrastructure company TransCanada is preparing to begin construction on the 1,845-mile US portion of its Keystone oil pipeline project in spring 2008. The project will transport oil from Canada to the US Midwest.
Keystone's pipeline will reach almost 2,150 miles, including additions to existing Canadian pipelines and mainline flow reversals. It is expected to start up in late 2009 with the capacity to deliver 435,000 b/d of crude oil from Alberta, Canada, to Illinois in the US.
The company has entered into contracts or conditionally awarded approximately $3 billion (2.04 billion) for major materials and pipeline construction contractors and is continuing to secure land access agreements.
TransCanada intends to apply to Canada's National Energy Board in November for additional pumping facilities to expand Keystone's capacity to 590,000 b/d and extend the line to Oklahoma, starting in 2010.
Based on the increased size and scope of the project and the executed material and service construction contracts, the Keystone project cost is now estimated at $5.2 billion.
The project has secured firm long-term contracts totalling 495,000 b/d for an average of 18 years. And producers and refiners continue to express interest in contracting for additional volumes.
Keystone received NEB approval this year for two major applications to construct and operate the Canadian portion of the project. Applications for US regulatory approvals at federal and state levels are proceeding.