Canadian pipeline giant TransCanada Corp. (TRP) has delayed the start date for the planned Keystone XL pipeline for a second time this year to 2016, as approval from Washington for the controversial project is still pending.
The Keystone XL pipeline-which would run from Alberta’s oil sands to the US Gulf Coast--will take at least two years to complete once approval is granted, and TransCanada is now expecting the green light early next year.
The Canadian company is now building the southern leg of Keystone XL, which does not cross the US border and does not require presidential approval.
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For the northern leg of Keystone from Alberta to the Gulf of Mexico, the US Department of State has commissioned an environmental study to determine how the pipeline might negatively impact the climate.
However, as the start date for Keystone continues to be pushed back, the estimated costs of the project continue to rise.
On Tuesday, 19 November, TransCanada raised its preliminary cost estimate for Keystone XL to at least $5.4 billion--$100 million more than its earlier estimate.
This estimate could rise further, according to TransCanada.
"That number will rise and we'll firm that up as we get clarity on exact timing," Don Marchand, TransCanada's chief financial officer, said at the company's annual investor day in Toronto on Tuesday.
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TransCanada shares were down 53 Canadian cents to C$46.77 by midafternoon on the Toronto Stock Exchange when the company announced the increased cost estimate.
TransCanada has been waiting five years for approval from Washington for this controversial project, which environmental groups say would promote development of oil sands that release more greenhouse gases during production and refining that other forms of oil.
Canada is pushing strongly for the project to promote growth within its own energy sector.
By. Joao Peixe of Oilprice.com