TransCanada Corp. will begin construction on the southern leg of its Keystone XL pipeline in coming weeks after securing the last of three key permits from the U.S. Army Corps of Engineers.
The company announced Friday it had received a permit for the 485-mile project from the Fort Worth district. Engineers in Tulsa and Galveston, Texas, previously signed off on the project.
“TransCanada is now poised to put approximately 4,000 Americans to work constructing the $2.3 billion pipeline that will be built in three distinct ‘spreads' or sections,” CEO Russ Girling said. “The Gulf Coast Project will contribute millions in property taxes to counties in Oklahoma and Texas — money that can be used to build roads, schools and hospitals.”
The planned pipeline will connect the crude oil storage hub at Cushing with refineries along the Gulf Coast.
Mickey Thompson, Domestic Energy Producers Alliance executive director, said the announcement was “excellent news” for oil companies.
“It can only be positive for anybody whose oil ends up in Cushing, which is most of Oklahoma's independent producers.”
Thompson said he expects the Keystone XL project to have an immediate impact on the price of West Texas Intermediate crude oil, which is set at Cushing.
WTI has been trading at a significant discount to Brent crude for the past few years because of insufficient pipeline capacity out of Cushing.
Thompson said he hopes the Keystone XL segment rebalances the playing field for producers in the Mid-Continent region.
“I wish it could be open in six months,” he said.
The Keystone XL project has been in the works since 2009, as TransCanada looks to build a pipeline linking Canada's oil sands with Gulf Coast refineries.
The Obama administration denied TransCanada a presidential permit in January amid concerns about potential environmental risks.
TransCanada in March announced plans to proceed with the southern part of the pipeline, while working to refine its route through Nebraska's Sand Hills region to win approval for the remainder of the project.
Environmental groups still are opposed to the pipeline project.