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TransCanada ramps up U.S. pipeline ambitions

Big Muddy rancher

Well-known member
TransCanada ramps up U.S. pipeline ambitions

By NORVAL SCOTT AND SHAWN McCARTHY , Globe and Mail Update

CALGARY and OTTAWA — — TransCanada Corp. is scaling up its plans to build a pipeline network connecting Alberta to southern U.S. markets, a move that highlights how strong demand and high crude prices are outstripping escalating costs and fuelling the province's oil sands boom.

TransCanada, which was already about to build its most expensive pipeline yet to meet that demand, is now planning an even larger project that would link Alberta to refineries on the U.S. Gulf Coast – raising the stakes in the competition among pipeline companies to supply that market.

“These projects … are much in demand by the market and well serve the U.S. national interest,” TransCanada chief executive officer Hal Kvisle told reporters yesterday after the company's annual general meeting in Calgary.

With prices for crude oil rising to nearly $120 (U.S.) a barrel, refiners in the U.S. are desperate to get hold of supplies from their stable northern neighbour, despite pressure from environmentalists who object to potential adverse effects from plans to triple production from the oil sands.

At present, the U.S. Midwest accounts for most exports of crude from the oil sands, putting producers at risk if that market becomes saturated and prices plummet. That has led pipeline firms like TransCanada to develop new projects that would open up untapped markets.

TransCanada's $5.2-billion (U.S.) Keystone pipeline, on which construction is set to start within months, aims to transport up to 590,000 barrels a day of crude oil from central Alberta to refineries in Patoka, Ill., and Cushing, Okla. It's expected to open up a vast market in the southern U.S. for Canadian producers, creating new buyers and improving price stability for crude from Alberta's oil sands.

Previously, TransCanada has said that it wants to reach markets even farther away by connecting Keystone's Oklahoma leg, once it is built, to refineries on the Gulf Coast, either by building a new pipeline or by acquiring and converting existing infrastructure.

That expansion was expected to be relatively modest in size. However, TransCanada now sees Keystone Stage 2 as incorporating both the Gulf Coast expansion and a massive new 36-inch pipeline that would transport another 750,000 barrels a day of crude – over half the current production from the oil sands – from Alberta directly to Nebraska, where it would join Keystone Stage 1.

While exact costs and details aren't yet available, the huge new pipeline would cost more than the original Keystone pipeline itself and be in service by around 2012, Mr. Kvisle said. TransCanada expects to launch an open season for the pipeline to gauge shipper interest later this year.

“The construction [of Keystone 2] would roll right into the construction of the other,” Mr. Kvisle said. “It's advantageous to us in terms of procuring pipe … and in terms of securing contractors.”

While the U.S. has an apparently insatiable appetite for oil sands product, refiners will have to make major investments to retool their plants in order to upgrade bitumen and refine the synthetic crude, said Joseph Dukert, an energy economist with the Washington-based Center for Strategic and International Studies.

“Because our production continues to decline and Mexico's imports into the U.S. are tapering off, we need all [the oil] we can get. The situation is going to continue to be tight,” he said. “But not all refineries are prepared to handle this stuff.”

There's also likely only to be enough supplies from the oil sands coming on-stream to support one giant pipeline to the Gulf Coast at a time. Effectively, that puts TransCanada in direct competition with rivals Enbridge Inc. , Kinder Morgan Inc., and closely held Altex Energy Ltd., all of whom have announced plans to build their own pipelines.

TransCanada reported first-quarter profit yesterday of $449-million (Canadian), well up from $265-million a year earlier. The company took a $27-million writedown on previously capitalized costs on the Broadwater liquefied natural gas project, which was rejected by /


Do you think it is such a good idea to have one customer for such a large part of our production?

Look what happened when we relied on that market for our beef.
 
A

Anonymous

Guest
Big Muddy rancher said:
Do you think it is such a good idea to have one customer for such a large part of our production?

Look what happened when we relied on that market for our beef.

As long as you don't send "defective, diseased, or tainted" crude oil/gas product there probably won't be any problems... :wink:
 

Silver

Well-known member
I expect that at some point it will need COOL and traceability as well. Especially if N Dakota starts producing, it will just be a matter of time until something 'wrong' is discovered with Canadian oil :wink:
 

HAY MAKER

Well-known member
Big Muddy rancher said:
TransCanada ramps up U.S. pipeline ambitions

By NORVAL SCOTT AND SHAWN McCARTHY , Globe and Mail Update

CALGARY and OTTAWA — — TransCanada Corp. is scaling up its plans to build a pipeline network connecting Alberta to southern U.S. markets, a move that highlights how strong demand and high crude prices are outstripping escalating costs and fuelling the province's oil sands boom.

TransCanada, which was already about to build its most expensive pipeline yet to meet that demand, is now planning an even larger project that would link Alberta to refineries on the U.S. Gulf Coast – raising the stakes in the competition among pipeline companies to supply that market.

“These projects … are much in demand by the market and well serve the U.S. national interest,” TransCanada chief executive officer Hal Kvisle told reporters yesterday after the company's annual general meeting in Calgary.

With prices for crude oil rising to nearly $120 (U.S.) a barrel, refiners in the U.S. are desperate to get hold of supplies from their stable northern neighbour, despite pressure from environmentalists who object to potential adverse effects from plans to triple production from the oil sands.

At present, the U.S. Midwest accounts for most exports of crude from the oil sands, putting producers at risk if that market becomes saturated and prices plummet. That has led pipeline firms like TransCanada to develop new projects that would open up untapped markets.

TransCanada's $5.2-billion (U.S.) Keystone pipeline, on which construction is set to start within months, aims to transport up to 590,000 barrels a day of crude oil from central Alberta to refineries in Patoka, Ill., and Cushing, Okla. It's expected to open up a vast market in the southern U.S. for Canadian producers, creating new buyers and improving price stability for crude from Alberta's oil sands.

Previously, TransCanada has said that it wants to reach markets even farther away by connecting Keystone's Oklahoma leg, once it is built, to refineries on the Gulf Coast, either by building a new pipeline or by acquiring and converting existing infrastructure.

That expansion was expected to be relatively modest in size. However, TransCanada now sees Keystone Stage 2 as incorporating both the Gulf Coast expansion and a massive new 36-inch pipeline that would transport another 750,000 barrels a day of crude – over half the current production from the oil sands – from Alberta directly to Nebraska, where it would join Keystone Stage 1.

While exact costs and details aren't yet available, the huge new pipeline would cost more than the original Keystone pipeline itself and be in service by around 2012, Mr. Kvisle said. TransCanada expects to launch an open season for the pipeline to gauge shipper interest later this year.

“The construction [of Keystone 2] would roll right into the construction of the other,” Mr. Kvisle said. “It's advantageous to us in terms of procuring pipe … and in terms of securing contractors.”

While the U.S. has an apparently insatiable appetite for oil sands product, refiners will have to make major investments to retool their plants in order to upgrade bitumen and refine the synthetic crude, said Joseph Dukert, an energy economist with the Washington-based Center for Strategic and International Studies.

“Because our production continues to decline and Mexico's imports into the U.S. are tapering off, we need all [the oil] we can get. The situation is going to continue to be tight,” he said. “But not all refineries are prepared to handle this stuff.”

There's also likely only to be enough supplies from the oil sands coming on-stream to support one giant pipeline to the Gulf Coast at a time. Effectively, that puts TransCanada in direct competition with rivals Enbridge Inc. , Kinder Morgan Inc., and closely held Altex Energy Ltd., all of whom have announced plans to build their own pipelines.

TransCanada reported first-quarter profit yesterday of $449-million (Canadian), well up from $265-million a year earlier. The company took a $27-million writedown on previously capitalized costs on the Broadwater liquefied natural gas project, which was rejected by /


Do you think it is such a good idea to have one customer for such a large part of our production?
Look what happened when we relied on that market for our beef.


I think if you read your post real slow,you will find the answer to your question obvious.
good luck

PS (hint)..........TransCanada reported first-quarter profit yesterday of $449-million
 
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