TransCanada seeks US nod for new $600-mn pipeline as Keystone lingers

Canada's largest pipeline operator TransCanada Corp is seeking US approval for another cross-border pipeline as it awaits a final decision for its $8-billion Keystone XL pipeline project.

The company has submitted an application to the US state department for its $600-million Upland pipeline, which is designed to transport crude oil from North Dakota's Bakken oil field to the proposed Energy East pipeline across Canada and to other pipelines.

The Upland pipeline will begin near the oil hub of Williston and go about 320 km north into Canadian province of Saskatchewan.

North Dakota, the second-biggest oil producing state in the US after Texas, produces around 1.2 million bpd of crude and about 60 per cent of that is transported by rail to refineries in eastern Canada and the north eastern US.

TransCanada expects Upland and Energy East pipelines would have sufficient capacity to improve supply security for eastern Canadian and US refiners, and decrease the need for foreign imports as well as help to reduce the dependence on rail transportation thereby reducing the risk of accidents and oil spills.

The proposed pipeline, which is expected to become operational by 2020, will have an initial capacity of 220,000 barrels per day (bpd) which will be later augmented to 300,000 bpd.

The pipeline requires the approval of the US president as it crosses the Canadian border into the US.

''Upland is about ensuring maximum North American benefits for the energy we produce and making sure it gets to market in the safest, most efficient and environmentally sound way possible,'' according to a company spokesman.

In addition to the permit from the state department, the project needs approvals from North Dakota's public service commission and Canada's national energy board.

TransCanada's Keystone XL pipeline project has been delayed for years as it has been languishing in the US political system. The US house of representatives has voted in favour of the project (See: US House of Representatives votes for Keystone XL pipeline construction), while president Barack Obama has vowed to veto it on environmental concerns.

The 1900-km Keystone XL will connect Canada's oil sands fields in Hardisty in Alberta to the refineries on the US Gulf Coast.

TransCanada's prestigious $12-billion Energy East pipeline is planned to transport over one million barrels a day (bpd) from western oil fields to Canada's east coast. The project has been delayed for a year on environmental issues.