Keystone XL Pipeline: Will it Ever Be Built? - Global Trade Magazine
  August 2nd, 2017 | Written by

Keystone XL Pipeline: Will it Ever Be Built?

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  • Keystone XL pipeline would Canadian oil country in Alberta and Saskatchewan to several US locations.
  • Many of TransCanada's original Keystone XL customers dropped out after Obama denied crossborder permit.
  • US refiners have been able to receive Canadian crude by rail cars or through other pipelines.

For all the fuss that was made over former President Barack Obama’s vetoing of a permit for the Keystone XL pipeline and for all the political hay made by current President Donald Trump in support of the project, we now hear that the pipeline may never be built.

That’s because executives of TransCanada, the proposed builder and operator of the pipeline have doubts over whether they can find enough customers to make the project viable, according to reporting in Politico.

Keystone XL is meant to connect Canadian oil country in Alberta and Saskatchewan to several US locations, including ports in Texas and Louisiana. Many of TransCanada’s original customers for Keystone XL dropped out after Obama denied the crossborder permit.

On January 24, 2017, just a few days after taking office, Trump signed an executive order giving the go-ahead to the Keystone XL pipeline, after it been nixed by Obama, by ordering an expedited environmental review process.

According to Politico, TransCanada remains confident in the decade-old project but has been struggling to find enough customers to make it worthwhile. The company also still needs approval from Nebraska regulators for the pipeline’s route.

Last week TransCanada on declared open season until September on bidding for contracts to transit oil throught the pipeline. A decision on whether to actually go through with construction will come only in November, said company executives on an earnings call with journalists and analysts.

It will take two years to construct the $7 billion pipeline, which could transport up to 830,000 barrels a day of heavy crude. US refiners have been able to receive Canadian crude by rail cars or through other pipelines, according to Politico. US oil imports from Canada reached 3.8 million barrels a day in 2016, up 52 percent since 2008.

TransCanada’s problem may be that new demand for oil is coming from mainly from Asia, meaning that Canadian oil exporters would rather transport their oil to west coast ports, rather then south to the US midwest and south.

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