TransCanada Tries Again for Nebraska's Approval of Keystone -- 2nd Update
February 16 2017 - 5:43PM
Dow Jones News
By Lynn Cook
TransCanada Corp. has rebooted its effort to build the Keystone
XL oil pipeline across Nebraska, where it had met with opposition
before it withdrew its application when the Obama administration
denied the company a federal permit in late 2015.
The company filed an application Thursday with the state's
Public Service Commission, executives said on a conference call
with investors and analysts to discuss earnings. Nebraska had been
at the center of opposition to the pipeline, largely based on
environmental concerns.
TransCanada's latest move had been expected since Donald Trump
was elected U.S. president. One of his first orders of business was
to invite TransCanada to reapply for a permit from the U.S. State
Department to allow the line to cross the border with the U.S. The
company did so last month.
Keystone XL's tentative route calls for it to originate in
Alberta's oil sands region, cross the U.S. border into Montana and
run through South Dakota to Steele City, Neb., where it would link
to existing pipelines to Gulf Coast refineries and ports.
Nebraska's permitting process, which requires a series of public
hearings, could take up to a year and is expected to again draw
strong opposition from residents, ranchers and farmers, as well as
environmental groups. Landowners had expressed concern about use of
eminent domain to seize land in the path of the pipeline.
TransCanada has said the Gulf Coast is the natural destination
for heavy Canadian oil because the many refineries in Texas and
Louisiana are geared to process the sludgy crude into gasoline,
diesel and other fuels. The company said it is working with
potential shippers on the oil pipeline to assess demand for space
on Keystone XL, with some customers wanting less than they did a
few years ago and others signaling they may want more.
Bold Alliance, a Nebraska-based group that opposes the line, has
long maintained that Keystone makes the U.S. little more than a
conduit to funnel foreign oil into the U.S. and south to ports for
export, with risks of spills along the way.
"Keystone XL is a foreign-owned pipeline, using foreign steel
headed to the foreign export market," said Jane Kleeb, president of
the Bold Alliance. "Keystone XL is and always will be all risk and
no reward."
In the years that Keystone XL was hamstrung in regulatory limbo
during former President Barack Obama's tenure, the entire energy
market changed. U.S. shale producers have unleashed a new wave of
crude in places like Texas and Oklahoma, which are closer to the
Gulf Coast, making transportation less costly than Keystone. And
many refineries made long-term arrangements to buy heavy crude from
countries other than Canada or from TransCanada's pipeline rival
Enbridge Inc., which also operates cross-border oil pipelines from
Canada.
Paul Miller, TransCanada's president of liquids pipelines, said
discussions with potential customers are ongoing but have taken on
a new urgency. Keystone XL's $8 billion price tag will be revised
later this year, he said.
TransCanada could have the permits it needs to build Keystone by
around the end of the year, but construction is unlikely to move
forward until well into 2018. Building the pipeline would then take
at least two years, Mr. Miller said.
The company on Thursday posted a loss for its latest quarter on
a hefty charge related to the sale of its Northeast U.S.
renewable-power generation business, but results still beat Wall
Street expectations. TransCanada also raised its quarterly dividend
11% to 62.5 Canadian cents per share.
For the three months ended Dec. 31, the company recorded a net
loss of 358 million Canadian dollars, or 43 Canadian cents a share,
compared with a loss of C$2.5 billion, or C$3.47 a share, in the
year-earlier period. TransCanada attributed the loss to the C$870
million write-down related to the sale of the U.S. Northeast power
business.
Excluding that charge and other items, adjusted earnings rose to
75 Canadian cents per share from 64 Canadian cents for the same
period in 2015. Revenue surged 27% to C$3.62 billion. Analysts
polled by Thomson Reuters had expected an adjusted 72 Canadian
cents a share on C$3.5 billion in revenue.
--Anne Steele contributed to this article.
Write to Lynn Cook at lynn.cook@wsj.com
(END) Dow Jones Newswires
February 16, 2017 18:28 ET (23:28 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
TC Energy (TSX:TRP)
Historical Stock Chart
From Mar 2024 to Apr 2024
TC Energy (TSX:TRP)
Historical Stock Chart
From Apr 2023 to Apr 2024