Canadian pipeline company TransCanada says it is assessing commitments to the Keystone XL pipeline, but few significant changes are expected. File photo by Kevin Dietsch/UPI | License Photo
May 5 (UPI) -- Pipeline company TransCanada said Friday it was revisiting shipper commitments for its planned Keystone XL project, but few changes are expected
TransCanada posted its results for a first quarter that saw U.S. President Donald Trump fast-track the approval for the long-delayed Keystone XL oil pipeline, first proposed about a decade ago. Mirroring developments for companies tied more closely to exploration and production, the pipeline company said first quarter income attributable to common shares was $468 million, a marked improvement over the $183 million reported during the same time last year.
"During the first quarter, we were very pleased to receive a U.S. Presidential Permit for Keystone XL and are now in the process of seeking regulatory approval in Nebraska while progressing commercial discussions with our customers," President and CEO Russ Girling said in a statement. "Success in advancing these or other growth initiatives could augment or extend the Company's dividend growth outlook through 2020 and beyond."
TransCanada said it expected a final decision on the pipeline project by the end of the year.
In March, a coalition of environmental advocacy groups filed a lawsuit in a federal court in Montana challenging U.S. State Department approval for the Keystone XL oil pipeline. The lawsuit charges the State Department with ignoring evidence that the heavier type of crude oil designated for the project is an environmental threat.
TransCanada is facing additional market pressure given other regional pipeline projects in the works. For TransCanada to get shippers to commit, it now has to compete with a Kinder Morgan project to Vancouver and a planned network for eastern Canada.
In its quarterly report, the company said the two-year time span between when former President Barack Obama sidelined the project and when President Donald Trump approved it meant it was expecting shipping commitments to change as new parties come on board and others move elsewhere.
"We expect this transition to be complete within a few months and would anticipate commercial support for the project to be substantially similar to that which existed when we first applied for Keystone XL," the company said.
Sandy Fielden, the director of research, commodities and energy at Morningstar, told UPI that Canadian pipelines in service now are full so new projects are needed.
"In the circumstances, Keystone XL will attract shippers for sure," he said. "However, it is questionable whether the full 830,000 barrels per day of capacity is going to be needed in the short term [2020 to 2025]."