Argus: TransCanada confirms Keystone line fill delayed
Houston, 23 February (Argus) TransCanada has officially extended the timeline for the start of commercial operations on its 435,000 b/d Keystone pipeline to mid-2010 from the first quarter as a result of the delayed line fill of the system, the company said today.
Keystone line fill will commence in the next week or two, TransCanada’s president of pipelines Russell Girling said today during the company’s earnings conference call.
TransCanada’s comments affirm what traders have suspected for months that filling the system had been pushed back. But until today, the company repeatedly told Argus that line fill began in December and was expected to be done by the end of March. Those comments came despite the fact that Canada’s National Energy Board (NEB) only approved Keystone’s pump stations on 19 January, a move that finally would allow crude to begin flowing on the system.
As recently as mid-January, TransCanada spokeswoman Cecily Dobson said, Line fill commenced in December 2009. We are accumulating oil and will continue through the first quarter of 2010. Around the same time, Marathon Oil’s vice-president of supply, distribution and planning for the downstream segment, told Argus he did not expect Keystone line fill to begin until mid-March.
After the NEB approved pump stations last month, TransCanada was required to provide shippers with 60 days notice that line fill volumes were required, according to several sources. This pushed line fill back, they said.
We are probably six to eight weeks outside of where we thought we were in the fourth quarter, Girling said today, dismissing the delay as immaterial. He called the longer timeframe for Keystone’s start the result of regulatory, permitting and start-up issues.
The company currently has 1mn bl of crude in storage, and expects to put 9mn bl of crude in the system over the next 100 days. Line fill is expected to be complete by the end of June, and full commercial operations will start before the end of the year, Girling said. Once in service, the system is expected to operate at a capacity of 217,500 b/d for the remainder of 2010, with the potential to move additional spot volumes, TransCanada chief executive Hal Kvisle said.
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