March 10, 2010

TransCanada may give Montana, North Dakota access to Keystone pipeline

BILLINGS, Mon.

TransCanada executives said they will consider letting Montana and North Dakota crude oil onto a proposed pipeline to the Gulf of Mexico, after hearing demands for access from U.S. oil producers.

Calgary-based TransCanada Corp. aims to start construction this year on the 3,200-kilometre Keystone XL pipeline. It’s part a US$12-billion investment in moving crude extracted from Canada’s oil sands to refineries in the United States.

The company previously rebuffed calls to build an “onramp” for crude from the Bakken oil fields of Montana, North Dakota and Saskatchewan, saying there was insufficient demand.

But under political pressure to reconsider, TransCanada vice-president Robert Jones said Keystone XL was “open for business” with conventional crude producers in the United States.

Jones made that pledge after meeting with several dozen oil company representatives assembled in Billings by Montana Gov. Brian Schweitzer and North Dakota Gov. John Hoeven.

“To me, the producers have shown their support by being here,” Jones said.

In coming weeks and months, TransCanada will meet further with producers to work out the particulars of a potential entry point to the pipeline, Jones said.

Initial cost estimates range from $80 million to $200 million for a project that would ship crude out of Montana and North Dakota in 100,000 barrel batches.

The Bakken formation holds an estimated 3.65 billion barrels of oil — enough to supply the entire country for about six months — and Keystone XL would pass right through it en route to the Gulf Coast.

Associated Press

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