Oil sands-carrier pipeline may be delayed
Funding uncertain from major shippers on Keystone pipeline
By Tom Stundza -- Purchasing, 10/29/2008 9:42:00 AM
Uncertainty over the pace of oil sands development could delay the construction of a major pipeline that will connect Canada’s Alberta province to the U.S. Gulf Coast, potentially slowing the flow of bitumen to an untapped refining market. The key utility is worried about the level of funding from protential major shippers on the pipeline.
The Globe and Mail newspaper in Toronto says that oil sands companies have committed huge volumes of crude oil to the $7-billion Keystone expansion project of Calgary-based utility TransCanada, which will take 500,000 barrels a day of Albertan crude to the U.S. Gulf starting about 2012. The Keystone pipeline will carry 590,000 barrels a day from Hardisty, Alberta, to refinery hubs in Illinois and Oklahoma from 2009--and then an extra 500,000 barrels a day to refineries in Houston and Port Arthur, Texas, by 2012.
But, delays in the oil sands development could push back the expansion by up to 18 months, says TransCanada’s CEO, Hal Kvisle.He tells the newspaper that oil sands production rates haven't kept pace with expectations because of delays in completing new projects, causing planning problems and funding commitment delays for pipeline firms and refiners. Now, several new oil sands projects have been postponed as companies fret over the impact of lower crude prices and increased capital costs, meaning output predictions could be scaled back even further.
