* TransCanada says approval delay could up Keystone XL costs
* Revises in-service date to second half of 2015
* First-quarter EPS C$0.63 vs C$0.50 year earlier
* First-quarter comparable earnings per share C$0.52
* Revenue rises 16 pct
* Shares fall 1.3 pct
By Scott Haggett and Bhaswati Mukhopadhyay
CALGARY, Alberta, April 26 TransCanada Corp
, Canada's No. 2 pipeline company, said on Friday the
long wait for U.S. government approval of its controversial
Keystone XL project will further delay completion of the
pipeline and push its cost above the company's $5.3 billion
TransCanada, which reported a 27 percent rise in
first-quarter profit on Friday, is waiting for the Obama
administration to issue a presidential permit for construction
of the line, which is designed to carry 830,000 barrels a day of
Canadian and U.S. crude oil to refineries on the Gulf of Mexico
That permit, pending now for more than four years, may face
further delays after the U.S. Environmental Protection Agency
condemned the State Department's draft environmental review of
the project earlier this week, saying it didn't properly address
a host of issues ranging from increases in carbon emissions to
the pipeline's social impact.
TransCanada, which had maintained that the line could be in
service in late 2014 or early 2015, said on Friday the wrangling
in Washington will delay its completion until the second half of
"Due to ongoing delays in the issuance of a presidential
permit for Keystone XL, we now expect the pipeline to be in
service in the second half of 2015 and, based on our pipeline
construction experience, the $5.3 billion cost estimate will
increase depending on the timing of the permit," the company
said in a release.
Environmental groups have exerted considerable pressure on
the White House to block the pipeline, saying it will lead to
more greenhouse gas emissions, pollute land and water, and plow
through the habitats of endangered species.
TransCanada said it has invested $1.8 billion so far in the
Despite the delay, the company said its customers still
support the line and none of the contracted shippers have backed
out of the project.
"Our shippers continue to support this pipeline. They have
right from the beginning ... and I expect they will continue to
support the pipeline" Russ Girling, TransCanada's chief
executive, told reporters.
TransCanada has already started construction on Keystone
XL's $2.6 billion southern leg, a 700,000 bpd project that will
take crude from the Cushing, Oklahoma, storage hub as far as
Houston. Work on the Cushing to Port Arthur, Texas, part of the
line is 70 percent complete and is expected to open by year's
Construction of the 76-kilometer (47 mile) Port Arthur to
Houston portion of the line begins later this year and will be
in service by mid-2014.
While it awaits a decision from the Obama administration,
the company is proposing a new line that could carry as much as
850,000 bpd from Alberta to Canada's Atlantic coast.
The company launched a process to gauge demand for the line
earlier this month. That process runs until June 17 and
TransCanada says the line could be in service by late 2017.
In reporting on its quarterly results, the company said net
income attributable to common shares rose to C$446 million ($437
million), or 63 Canadian cents a share, from C$352 million, or
50 Canadian cents a share, a year earlier.
Comparable earnings, which exclude most one-time items, were
C$370 million, or 52 Canadian cents a share.
Revenue rose 16 percent to C$2.25 billion.
TransCanada shares fell 63 Canadian cents to C$49.14 on the
Toronto Stock Exchange on Friday.