August 6, 2010 / 9:28 PM / 8 years ago

UPDATE 1-Keystone oil pipeline "halfway" to full capacity

* Project is planned in three phases

* $12 billion project is 83 percent subscribed

HOUSTON, Aug 6 (Reuters) - TransCanada Corp’s (TRP.TO) Keystone oil pipeline from Canada to the U.S. Midwest is “halfway” to full capacity of 435,000 barrels per day, a spokesman said on Friday.

“We’re saying it’s halfway there. We’re not hanging a number on it,” TransCanada Chicago-based spokesman Jim Prescott said of the line that started operations June 30 between Hardisty, Alberta, and Patoka, Illinois.

Keystone represents a substantial expansion of flows of Canadian crudes into the United States, which will add new complexity to U.S. oil markets.

The $12 billion project is 83 percent subscribed for its ultimate 1.1 million bpd capacity, TransCanada said. Prior to Keystone’s startup, Canada was shipping 2 million bpd to the United States, U.S. government data show.

The project is planned in three phases to ultimately reach the Texas Gulf Coast at Nederland.

Phase Two, construction of which has begun, is to branch off the Hardisty-Patoka Phase One line at Steele City, Nebraska, and go to Cushing, Oklahoma. With other planned system expansion, it will raise capacity to 590,000 bpd.

Phase Three would reach from Cushing to Nederland on the Texas Gulf Coast and take the line to its ultimate targeted capacity.

TransCanada awaits U.S. government permits necessary to complete Phases Two and Three of the project but hopes to begin construction of the third phase by early 2011, spokesman Calgary-based spokesman Terry Cunhy said.

Reporting by Bruce Nichols; Editing by Sofina Mirza-Reid

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