UPDATE 1-TransCanada ready to start building U.S. oil line

(Adds details. In U.S. dollars)

CALGARY, Alberta, March 14 (Reuters) - TransCanada Corp (TRP.TO: Quote, Profile, Research, Stock Buzz) plans to start building its $5.2 billion Keystone oil pipeline to U.S. markets in the second quarter after winning a key approval from Washington, the company said on Friday.

TransCanada said the U.S. State Department issued a presidential permit to build facilities at the Canada-United States border for the 590,000 barrel a day pipeline.

The pipeline, which is co-owned by ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz), will extend to Oklahoma and southern Illinois from Alberta, where crude output from the oil sands is forecast to triple over the next decade.

Keystone is scheduled to be in service in late 2009.

"The U.S. Department of State has determined that this is in the national interest, so after a culmination of years of hard work we're certainly pleased to have the permit," TransCanada spokeswoman Shela Shapiro said.

Much of the Canadian portion of the 3,456 km (2,148 mile) line will consist of natural gas pipeline converted for shipping crude.

TransCanada has already filed to Canadian regulators for an expansion of Keystone's capacity. A hearing into that is slated to start next month. (Reporting by Jeffrey Jones; editing by Rob Wilson)