NEW YORK Aug 27 Crude oil may not flow on the
southern leg of TransCanada's Keystone XL pipeline in
the United States until the first quarter of next year, later
than the company expects, energy intelligence group Genscape
said on Tuesday.
Earlier this month, TransCanada said the 700,000 barrel per
day (bpd) line from oil storage hub Cushing, Oklahoma, to
Nederland, Texas is 90 percent complete and the company is
working to bring it online by the end of 2013.
"Genscape believes this estimate to be optimistic based on
construction progress. Genscape now estimates Q1 2014 to be a
more realistic in-service date," the group said in a statement.
Genscape monitors energy infrastructure through photography
taken from overhead flights and remote sensors that detect
activity at installations such as refineries.
From its Aug. 18 flight over the pipeline's path, Genscape
said instillation work still needs to take place at Cushing,
where TransCanada will have 2.25 million barrels of storage
"Four of the seven newly constructed tanks have hydrotested
with a fifth tank currently hydrotesting," it said. "However,
mixer installation and tank pipeline connections have yet to be
completed for any of the seven new tanks."
TransCanada declined to comment on the Genscape report.
Instead, it reiterated its Aug. 20 statement.
"We are over 90 per cent complete on construction and our
testing and commissioning activities are also underway. Testing
and commissioning work will take place over the next few months
and we continue to focus on bringing the pipeline into service
in late-2013," it said in Tuesday's statement.
The 485-mile (780-kilometer) pipeline would help move crude
oil stored at Cushing to refineries on the Gulf Coast, easing a
glut that reached a historical peak earlier this year and
weighed on U.S. benchmark oil futures.
Stocks have depleted in recent weeks as other pipeline
projects have come on stream and after a large Midwestern
refinery restarted an overhauled unit, prompting higher demand
for Cushing oil.
At 37 million barrels, crude oil inventories at the hub are
at their lowest level since March 2012, but they are still far
off record lows of 12 million barrels in April 2004, when the
U.S. Energy Information Administration began collating Cushing