NEB Approves Keystone Cushing Expansion

The National Energy Board has approved the TransCanada Keystone Pipeline GP Ltd. Cushing application to expand the Canadian portion of the Keystone pipeline.

The expanded facilities will allow Keystone to increase its transportation capacity by 24,800 cubic metres per day, equivalent to 156,000 bbls per day. The overall transportation capacity will increase from the previously projected 435,000 to 591,000 bbls per day.

The Canadian portion of the Keystone pipeline will extend from Hardisty, Alberta to a point near Haskett, Manitoba. The expansion, consisting of seven new pump stations, increased motor sizes at seven pump stations, and the addition of pumping units at 13 previously approved pump stations, has an estimated value of $348 million.

In making its decision, the NEB heard from intervenors on several issues. The Metis Nation - Saskatchewan stated that Keystone failed to identify it as an interested stakeholder and to provide information at the start of project consultation. The Alberta Association of Pipeline Landowners and the Hadwin Cattle Co. Ltd. expressed concerns related to land use, including noise impacts. The Alberta Federation of Labour stated that the project could have negative consequences for domestic industries and employment.

The NEB said it was generally satisfied with Keystone's consultation efforts with stakeholders. In order to monitor ongoing consultation efforts, the NEB directed Keystone to provide further updates on its consultation with all potentially affected persons and groups, including the Metis Nation - Saskatchewan.

The NEB also directed Keystone to provide information from the detailed comprehensive noise assessment to the Alberta Association of Pipeline Landowners and the Hadwin Cattle Co.

On balance, the NEB determined that the Cushing Expansion will likely provide a positive economic benefit for Canadians. The NEB also determined that Keystone's proposal is consistent with tolling and tariff requirements of Part IV of the NEB Act.

Daily Oil Bulletin, Fri July 18 2008

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