January 31, 2014 / 10:56 PM / 6 years ago

UPDATE 1-TransCanada lauds U.S. review of Keystone XL project

By Scott Haggett and Julie Gordon

CALGARY/VANCOUVER Jan 31 (Reuters) - TransCanada Corp’s chief executive welcomed a favorable U.S. environmental review of the company’s Keystone XL project on Friday, calling the report an important milestone for the final approval of the controversial pipeline.

The U.S. State Department issued its long-awaited Final Supplemental Environmental Impact Statement on the $5.3 billion pipeline project on Friday. It concluded that allowing the line to proceed would not raise the pace of development in Canada’s oil sands, a key argument of the pipeline’s opponents.

The report, issued more than five years after TransCanada first applied for a presidential permit for the line, triggers a 90-day comment period. Although it does not dictate the timing of a final decision on the project from the Obama administration, Russ Girling, the company’s chief executive, said the review was a key step for the pipeline.

“We are very pleased with the release and being able to move this next stage of the process,” Girling said on a conference call with reporters “It’s been long in getting here, but obviously as a company we’re well prepared to move into this next phase.”

Keystone XL, which would carry 830,000 barrels per day of crude oil from Hardisty, Alberta, to the refining hub on the Gulf coast of Texas, has firm support from the Canadian government and the country’s oil industry. But the project is bitterly opposed by environmentalists concerned about greenhouse gas emissions from oil sands developments.

“The Canadian oil industry is sitting on top of a tar sands carbon pollution bomb and Keystone XL is the fuse needed to light it,” Larry Schweiger, chief executive of the National Wildlife Federation, said in a statement.

The line’s backers were ebullient at the favorable report. Canadian Natural Resources Minister Joe Oliver, who has made a number of trips to Washington to lobby for approval of the project, called for a speedy final decision on Keystone XL.

“This is a positive step on the route to approval. We are pleased to see it move toward completion,” the minister said at a press conference. “I’m hoping that after the process which is outlined (the 90-day review period), the decision will be taken expeditiously.”

Despite more than five years of delay, oil producers that contracted to ship their oil on the line remain committed to the project, Girling said. The Canadian Association of Petroleum Producers, whose members will supply the lion’s share of the crude shipped on the line, also welcomed the report.

Oil sands producer Cenovus Energy Inc, which expects to move up to 75,000 barrels per day on Keystone XL, hopes the report will be the final step needed to convince the U.S. administration to approve it.

“We haven’t had a chance to do a thorough review, but initially we’re pleased with the findings of the environmental impact study and hope this latest research inspires a timely decision,” Paul Reimer, a senior vice-president at Cenovus, said in a statement. “If the decision is based on facts and science, like politicians are promising, then it should be approved.”

TransCanada shares rose 59 Canadian cents, or 1.2 percent, to C$48.42 on the Toronto Stock Exchange on Friday.

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