Keystone Pipeline starts deliveries from Canada’s oil sands to Illinois

CALGARY, Alta. – TransCanada Corp. on June 30 announced that linefill of the first phase of the US$12 billion Keystone Pipeline has been completed and commercial deliveries of crude oil to U.S. Midwest markets at Wood River and Patoka, Ill., began on June 30.
"This represents a significant milestone in the overall development of the Keystone Pipeline project," says Hal Kvisle, TransCanada president and chief executive officer. "Looking forward, Keystone will play an important role in linking a secure and growing supply of Canadian crude oil with the largest refining markets in the United States, significantly improving North American energy security.
"The pipeline will also continue to have a significant impact on the North American economy through the thousands of manufacturing and construction jobs it is creating and the millions of dollars in tax revenues that will be paid annually to state and local authorities," added Kvisle. "Recently, an independent economic study found that the Keystone Gulf Coast expansion alone would inject more than US$20 billion into the U.S. economy and create 119,000 person-years of employment.
"We take pride in our long-standing reputation as a safe pipeline operator and socially responsible company," added Kvisle. "Construction and operation of the Keystone Pipeline system will continue to meet or exceed world-class safety and environmental standards. We are committed to being a reliable and safe operator that treats all stakeholders with honesty and respect."
In Canada, the first phase of Keystone involved the conversion of approximately 537 miles of existing natural gas pipeline in Saskatchewan and Manitoba to crude oil pipeline service. It also included building 232 miles of new 30-inch diameter pipeline, 16 pump stations and the Keystone Hardisty Terminal.
The U.S. portion of the Keystone Pipeline included laying 1,084 miles of new 30-inch pipeline in North Dakota, South Dakota, Nebraska, Kansas, Missouri and Illinois. It also involved construction of 23 pump stations and delivery facilities at Wood River and Patoka, Ill.
TransCanada has begun construction of the second phase of Keystone. It includes a 298-mile extension from Steele City, Neb., to Cushing, Okla. and 11 new pump stations which will increase the capacity of the pipeline from 435,000 b/d to 591,000 b/d. The second phase of Keystone is expected to be in-service in the first quarter of 2011.
In July 2008, TransCanada announced plans to expand the Keystone crude oil pipeline system and provide additional capacity of 500,000 b/d from Western Canada directly to the U.S. Gulf Coast.
TransCanada received approval in March 2010 from both the National Energy Board in Canada and the South Dakota Public Utility Commission for the proposed Gulf Coast Expansion project. TransCanada expects to begin construction of the Gulf Coast expansion in the first quarter of 2011, pending the receipt of all regulatory approvals.
The Keystone Gulf Coast Expansion project involves construction of a 1,661-mile, 36-inch crude oil pipeline that will begin at Hardisty, Alta., and extend southeast through Saskatchewan, Montana, South Dakota and Nebraska. It would incorporate the portion of the Keystone Pipeline that is currently under construction through Kansas to Cushing, Okla. The pipeline will then continue on through Oklahoma and Texas to a delivery point near existing terminals on the Gulf Coast, to serve the Port Arthur, Texas, marketplace.
When completed, the expansion project will increase the commercial capacity of the Keystone Pipeline system to approximately 1.1 million b/d.
The US$12 billion Keystone Pipeline system is 83 per cent subscribed with long-term, binding contracts that include commitments of 910,000 b/d for an average term of approximately 18 years.