US State Dept oks pipeline to ship oil from Canada

WASHINGTON, March 3 (Reuters) - The U.S. State Department on Monday published approval of a presidential permit for the $5.2 billion Keystone Pipeline to ship crude oil from Alberta to U.S. Midwest.

The pipeline, jointly owned by TransCanada Corp. (TRP.N) and ConocoPhillips (COP.N), will have an initial capacity of 435,000 barrels per day in late 2009 and then expand to 590,000 barrels a day in late 2010.

The State Department took two years to review the project and issue a permit for construction and operation of the pipeline at the U.S-Canada border crossing. The permit approval was published in Monday's Federal Register of government regulations.

The total length of the pipeline will be 2,148 miles (3,456 kilometres), with 1,379 miles (2,219 kilometres) of new pipeline to be constructed in the United States.

The Canadian portion of the project involve 232 miles (373 kilometres) of new pipeline and the conversion of 537 miles (864 kilometres) of existing TransCanada pipeline from transporting natural gas to crude oil.

The pipeline will transport crude oil from Hardisty, Alberta to U.S. Midwest markets at Wood River and Patoka, Illinois and to Cushing, Oklahoma.

Canada is already the biggest foreign oil supplier to the United States, shipping an average 1.9 million barrels of crude a day last year. (Reporting by Tom Doggett; Editing by David Gregorio)