(Reuters) - TransCanada Corp, Canada’s No.2 pipeline operator, will make a final investment decision on its Keystone XL project by December, the company said on Friday as it reported a better-than-expected profit.
The December timeline is the first time the company has publicly set a deadline about making an investment decision for the project since U.S. President Donald Trump approved Keystone XL in March, reversing a decision by Barack Obama.
The investment decision will be based on shipper demand and a regulatory outcome from the U.S. state of Nebraska, through which the project passes, Paul Miller, executive vice president and president of liquid pipeline at TransCanada, said in a conference call after the release of quarterly results.
“Our assessment of these factors will really drive our investment decision when we get into that November-December time frame,” he said.
While TransCanada has “good support” from existing shippers, including those who departed after Keystone XL’s 2015 rejection, it is seeking new entrants and wants a “significant” level of commitment, Miller said, without specifying precise figures.
TransCanada launched an open season on Thursday for additional commitments for Keystone XL. The expansion increases the capacity of the current Keystone system from Canada’s oil-producing Alberta province to the Gulf of Mexico.
TransCanada also said on Friday it will invest about C$160 million ($129 million) to expand the capacity of the Canadian natural gas mainline, a move that could help producers who have been denied an export route after this week’s cancellation of the Pacific NorthWest project.
Malaysian state-owned Petroliam Nasional Bhd [PETR.UL], or Petronas, announced scrapping of its Pacific NorthWest liquefied natural gas terminal in Canada’s British Columbia province this week, due to depressed commodity prices.
TransCanada, which spent at least C$500 million to build the pipeline connecting gas wells to the terminal, said it would be reimbursed this year for costs associated with the project.
The company’s profits on Friday were helped by strength in its U.S. natural gas pipelines and liquids pipelines units.
Revenue from the company’s U.S. natural gas pipelines unit more than doubled to C$879 million. Its net income attributable to shareholders rose to C$881 million, or C$1.01 per share, in the second quarter ended June 30, compared with C$365 million, or 52 Canadian cents per share, a year earlier.
On an adjusted basis, the company earned 76 Canadian cents per share beating analysts’ estimate of 69 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose nearly 17 percent to C$3.22 billion.
Reporting by Ahmed Farhatha in Bengaluru and Ethan Lou in Calgary, Alberta; editing by Shounak Dasgupta, Bernard Orr
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