(Corrects cost of pipeline in first paragraph to $2.3 billion instead of $5.3 billion)
By Scott Haggett and Nia Williams
CALGARY, Alberta, Jan 22 (Reuters) - TransCanada Corp said on Wednesday it is shipping crude oil on the 700,000-barrel-per-day Gulf Coast pipeline, a $2.3 billion project expected to help eliminate a bottleneck that has warped the U.S. oil market for three years.
The new line will take Canadian crude from TransCanada's existing Keystone line and U.S. crude oil from the bloated Cushing, Oklahoma, storage hub to the cluster of refineries on the Gulf Coast of Texas.
The Gulf Coast line is the southern leg of TransCanada's controversial Keystone XL project, which, more than five years after the initial filing, is still awaiting a final decision from the Obama Administration.
The start-up of the Gulf Coast project will give Canada's oil sands producers their first large-scale access to the refining hub on Texas' Gulf Coast. It could also help alleviate steep discounts on Canadian crude, which dropped to more than $40 per barrel below the West Texas Intermediate benchmark in November.
The new line is also expected to help lower inventories at Cushing, the pricing point for the New York Mercantile Exchange's West Texas Intermediate (WTI) contract, North America's benchmark oil price. A surplus of crude at the storage hub has depressed U.S. oil prices, with WTI trading well below crudes priced on the European Brent benchmark.
The pipeline will likely ship just over 300,000 bpd of oil this month, traders said last week.
TransCanada shares were up 13 Canadian cents to C$48.60 by midmorning on the Toronto Stock Exchange. (Additional reporting by Selam Gebrekidan in New York; Editing by Marguerita Choy)