TransCanada launched an open season on July 27 to solicit additional binding commitments from interested parties for transportation of crude oil on the Keystone pipeline and for the Keystone XL pipeline project from Hardisty, Alberta to markets in Cushing, Oklahoma and the U.S. Gulf Coast.
And while the close of the open season is in September, final results likely won’t be known until November, according to a company official.
TransCanada has had discussions with its existing shipper group as well as with new entrants, said Paul Miller, executive vice-president and president of liquids pipelines discussing the Keystone XL open season on a the company’s second-quarter conference call.“To date, we have achieved good support from our legacy shippers which gives us a good base to launch this open season.”
The open season also provides an opportunity for known parties to bid for capacity and for others to assess the opportunity, said Miller.
“Our goal remains to achieve a significant level of long-term 20 year contracts and this open season will give us that opportunity to see what that market support is.”
When the Keystone XL permit was denied late in 2015 by President Barack Obama, many of the shippers reviewed other options, he said.
“Now that this option is again in front of them, they have come back,” he said, adding that prospects have changed since the Trump administration granted the permit in March.
“Over the course of the last four or five months since we received the permit, it really has been just a function of refreshing the legacy contracts and getting the documentation in place.”
Following the close of the open season Sept. 28, 2017, it will take a couple of months to work through the contracts so TransCanada likely won’t be in a position to know the final results until November, he said. That will coincide with when it expects to have a ruling from Nebraska regulators on a route through the state, analysts heard. “Those two items, commercial support and regulatory approval, remain the last two factors we are pursuing.”
If the company decides to proceed with Keystone XL, it would still take six to nine months to begin staging of construction crews, followed by a two-year construction period, according to Miller.