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UPDATE 1-TransCanada's Keystone line now delivering oil
June 30, 2010 / 5:03 PM / in 7 years

UPDATE 1-TransCanada's Keystone line now delivering oil

* First phase of Keystone now delivering oil

* Construction already begun on expansion program (Adds details. In U.S. dollars unless noted)

CALGARY, Alberta, June 30 (Reuters) - TransCanada Corp’s (TRP.TO) $5 billion Keystone pipeline began operating on Wednesday, delivering 435,000 barrels per day of Canadian oil sands crude to Illinois refiners.

TransCanada, the country’s No. 1 pipeline company, said it has completed filling the Keystone line with oil and is making commercial deliveries to U.S. Midwest refineries, two years after construction began.

The new line is just the first phase of a $12 billion program to increase market access for oil sands crude in the United States. TransCanada has already begun work on extending Keystone with a branch running from Steele City, Nebraska, to Cushing, Oklahoma, which will boost capacity to 591,000 barrels a day next year.

The company is also in the planning stages of its $7 billion Keystone XL line, which will carry 510,000 bpd from Hardisty, Alberta, to the U.S. Gulf Coast refining hub. Construction of the line is expected to be complete in 2013.

Enbridge Inc (ENB.TO), Canada’s No. 2 pipeline company, is also expanding its system to carry more Canadian crude to U.S. Midwest. Its 450,000 bpd Alberta Clipper pipeline is currently being filled with oil and should be in service by the end of September.

TransCanada shares were up 26 Canadian cents at C$35.73 at midday on Wednesday on the Toronto Stock Exchange.

$1=$1.06 Canadian Reporting by Scott Haggett; editing by Peter Galloway

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