(Adds additional comment and detail from executive interview)
By Scott Haggett and Nia Williams
CALGARY, Alberta Dec 17 TransCanada Corp
expects its new 700,000-barrel-per-day Gulf Coast oil
pipeline to begin service on Jan. 22, Chief Executive Russ
Girling said in an interview on Tuesday.
The company is currently filling the Cushing, Oklahoma, to
Port Arthur, Texas, pipeline with the 3 million barrels of crude
oil needed before it can be placed into normal operation.
Initial testing is showing no issues with the line and
shippers were told of the planned in-service date on Monday.
"We need to make sure that we continue to test things as we
load the pipeline with oil," Girling said. "Based on our current
estimates, January 22 is what we've told our shippers for
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 last
Girling said much of the oil on the line will come from
shippers on the company's existing 590,000 bpd Keystone
pipeline, which takes crude from Hardisty in central Alberta to
"We are now actually connected all the way to the Gulf
Coast," Girling said. "The shippers (on the Keystone line) have
the ability to not deliver at Cushing, they can deliver right
through to the Gulf Coast. So we actually have ... a contiguous
system that has the ability, once Gulf Coast is up and running,
to deliver 600,000 barrels per day to the coast."
Girling said oil that would have gone to Cushing and Wood
River, Illinois, Keystone's two existing delivery points, can be
diverted to Texas refineries if prices warrant.
"Right now the gulf coast is priced higher than
mid-continent barrels," he said. "So right now all of our
shippers on the base system will want to take their barrels in
The Gulf Coast line will also take oil from shippers at
Cushing who signed up for space on the line prior to
construction. Girling said those customers will retain the right
to ship on the project after the northern leg of the Keystone XL
project is complete.
The Gulf Coast line will also take some Cushing crude from
shippers who have not signed binding contracts for capacity on
the line, however that group will lose their access to the line
when the northern leg of the project is complete, Girling said.
TransCanada shares were up 5 Canadian cents to C$46.78 in
afternoon trading on the Toronto Stock Exchange.
(Editing by Gerald E. McCormick and Phil Berlowitz)