The TransCanada Corp. executive responsible for the development of the Keystone XL pipeline said a Montana court ruling that barred the start of construction of the project is "manageable."
Paul Miller, the Calgary, Alberta-based company's president of liquids pipelines, said the ruling came earlier than expected, which gives the company insight into the project approval's perceived deficiencies and time to review it as it awaits other rulings.
"It's difficult to tell what impact it will have on our schedule," Miller said at TransCanada's investor day in Toronto on Nov. 13. The company has yet to make a final commitment to build the line, although it had planned to start preliminary work along the route as early as 2019. Miller said TransCanada remains "fully committed" to advancing the project.
A Montana judge ordered work on the project to stop in a Nov. 8 decision, citing inadequate environmental studies and consultations in a U.S. Department of State assessment of the line's impact. The assessment was used in the issuance of a presidential permit that had previously been denied.
President Donald Trump called the ruling "a disgrace" and hinted at an appeal of the decision. TransCanada is also waiting on the outcome of a court challenge to a Nebraska regulator's approval of its route through that state before making a final decision to construct the pipeline, which would carry as much as 830,000 barrels per day of mostly oil-sands-derived crude from Alberta to a hub in Steele City, Neb.
Bakken NGL proposal
TransCanada is also considering an expansion of the Northern Border natural gas system, which links western Canada with the U.S. Midwest, to take on more gas and liquids from the Bakken Shale in North Dakota. TransCanada operates the system and owns it with Oneok Inc.
The expansion would pick up natural gas and NGLs from the Bakken in North Dakota, where companies are looking for pipelines to carry away gas associated with oil production. Among the options the company is considering for the region is reversing the flow of the Bison pipeline, which connects the Powder River Basin in Wyoming with Northern Border, to take gas to Western markets.
"We could potentially reverse flow on Bison and take Bakken production south on Northern Border into Bison," said Stan Chapman, president of TransCanada's U.S. gas pipelines unit. "We also could bypass Bison and just take new production all the way down."
The expansion is being considered in light of "the value of the NGL and liquids that are behind that gas stream and ... the growing production," Chapman said. "It seems to make sense that a new ... line out of that region is needed."
TransCanada, which has already received about C$1 billion in reimbursement for its expenses on the Coastal GasLink project to supply gas to a Royal Dutch Shell PLC-led LNG project in Canada, could invest in a liquefaction facility if the right opportunity arises, Chapman said. Describing LNG as an "intriguing opportunity," he said many aspects of LNG projects are in line with TransCanada's investment criteria.
"We like to do deals with long-term contracts that are take-or-pay in nature and have investment-grade counterparties," Chapman said. "When you look at an LNG terminal and their paradigm, it seems to fit, all things being equal."
