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NEB Greenlights Preliminary Work On Keystone XL

Keystone

The National Energy Board of Canada has approved preliminary, land-clearing work for TransCanada’s Keystone XL oil pipeline, CBC reports, noting that the approval came following a request by the company to be allowed to clear some trees and foliage around parts of the route of the controversial pipeline in anticipation of further developments around the project.

In November last year, Montana District Judge Brian Morris, who had earlier ordered the suspension of work on the Keystone XL pipeline, allowed TransCanada to conduct preliminary activities related to the project, including engineering and planning, oil shipment contract confirmations, and the acquisition of land rights, equipment, and permits. Whether the project would go any further than this remains as of yet unclear.

The Keystone XL, vetoed by President Obama and then given the green light by President Trump, will carry heavy oil from Alberta to U.S. refineries. The 830,000 bpd pipeline will run from the Albertan oil sands through Montana and South Dakota, ending in Nebraska, where it will connect to the existing pipeline network that goes on to the Gulf Coast.

There has been vocal opposition to the project, with opponents arguing that U.S. refiners simply do not need the additional 830,000 bpd, along with the usual worry about leaks and spills that feature heavily in anti-pipeline protests.

However, with light crude production in the Lower 48 growing fast, U.S. refiners might in fact need the additional amounts of heavy crude, which Gulf Coast refineries require to produce a wider range of products beyond gasoline. The pipeline will also relieve some of the pipeline pressure that Canadian oil producers are facing.

Despite the opposition, TransCanada is still upbeat about its construction plans: the company asked permission for the pre-construction work in hopes it will make the 2019 construction season, which will begin in the spring, and complete the pipeline by 2021, as scheduled.

By Irina Slav for Oilprice.com

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