TransCanada readies southern leg of Keystone XL for oil delivery #oil
TransCanada readies southern leg of Keystone XL for oil delivery
SHAWN McCARTHY – GLOBAL ENERGY REPORTER
OTTAWA — The Globe and Mail
Published Monday, Dec. 09 2013, 12:25 PM EST
Last updated Monday, Dec. 09 2013, 12:32 PM EST
TransCanada Corp. has begun to fill its Gulf Coast pipeline with more than 3 million barrels of crude from Cushing, Okla., as it prepares to begin commercial operation that could provide a lift to North American crude prices.
Starting in the new year, the Gulf Coast line – which is essentially the southern leg of the Keystone XL pipeline – will deliver 700,000 barrels per day of crude from Cushing to Texas and help to ease the glut of crude at the Oklahoma terminal where the price of the benchmark West Texas Intermediate is set.
TransCanada said Monday that it began to fill the pipeline on Saturday, and will take the next few weeks to ensure its safety as it increases the rate of flow.
“The Gulf Coast project is an important part of modernizing America’s energy infrastructure and providing U.S. refineries with the crude oil they need to create gasoline and other products we rely on,” a company spokesman said in a statement Monday.
Analysts have blamed a lack of pipeline access from Cushing to the U.S. Gulf Coast for a wide differential between West Texas Intermediate – which serves as a benchmark for Canadian crude – and international crude source like North Sea Brent.
On Monday, Brent traded at about $110 (U.S.) per barrel, while WTI was trading at $97.78 a barrel in New York at noon.
U.S. President Barack Obama endorsed the construction of the southern leg of the Keystone XL plan, though TransCanada did not need the same type of presidential permit that is required for the long-delayed, cross-border portion of the KXL line further north.
If approved, Keystone XL would deliver some 800,000 barrels per day of crude from Canada to the Gulf Coast, in addition to as much as 300,000 barrels per day of oil from North Dakota’s Bakken field.
However, the U.S. State department is still considering whether it will approve the project, which is staunchly opposed by American environmental groups who argue it will spur additional greenhouse gas emissions from the oil sands.