Nebraska and TransCanada Corp reached a deal on Monday on finding a new route for the stalled Keystone XL pipeline that would steer clear of environmentally sensitive lands in the state.
Under pressure from green groups, the U.S. State Department ordered the company last week to find a new route for the line in a decision that set back the $7 billion, Canada-to-Texas pipeline by more than a year.
The pipeline would deliver 700,000 barrels a day of crude from Alberta's oil sands to Texas refineries. But environmentalists strongly oppose the project, because of the route, concerns about spills and carbon emissions from production of oil sands crude.
In the deal with Nebraska, the state would pay for the new studies to find a route that would avoid the Sand Hills region and the Ogallala aquifer, which provides water for millions in the area.
Nebraska State legislators will vote on the deal on Tuesday, Mike Flood, the legislature's speaker said.
"TransCanada is willing to consider a route that sites the pipeline out of the Sand Hills," said Flood.
"This is our land. These are our people. We will pay for this. It's the right thing to do."
Terry Cunha, a spokesman for TransCanada declined to comment on the specifics of the deal, saying the company planned to issue a news release. However he said in an email that the agreement does not specify a new route for the controversial pipeline.
(Reporting by Michael Avok, writing by Scott Haggett; editing by Rob Wilson and David Gregorio)