TransCanada Files Regulatory Application for Keystone Oil Pipeline Project
CALGARY, Alberta – June 6, 2006 – TransCanada Corporation (TSX, NYSE: TRP) (TransCanada) today announced that its wholly owned subsidiaries, TransCanada PipeLines Limited (TCPL) and TransCanada Keystone Pipeline GP Ltd. (Keystone), have filed an application with the National Energy Board (NEB). The application seeks approval to transfer a portion of TransCanada’s Canadian Mainline natural gas transmission facilities to the Keystone Oil Pipeline project for the purposes of transporting crude oil from Alberta to refining centres in the U.S. Midwest.
“The Keystone Oil Pipeline project is an innovative and cost-competitive proposal to transport a significant amount of new Canadian crude oil to key U.S. markets in late 2009,” says Hal Kvisle, chief executive officer. “Crude oil shippers have recognized the value of our proposal by committing to long-term transportation contracts. The conversion of a small segment of our extensive natural gas pipeline system to crude oil transmission service maximizes the use of an existing asset while maintaining sufficient capacity on our Mainline system to serve forecasted demand for gas transportation.”
The Keystone Oil Pipeline project is a proposal to build a 2,960-kilometre (1,830-mile) pipeline that will have a nominal capacity to transport approximately 435,000 barrels per day of crude oil from Hardisty, Alberta, to U.S. Midwest markets at Wood River and Patoka, Illinois. The pipeline can be expanded to a nominal capacity of 590,000 barrels per day with additional pump stations. The Canadian portion of the project involves the construction of approximately 370 kilometres (230 miles) of new pipeline and the conversion of approximately 860 kilometres (530 miles) of existing TransCanada Canadian Mainline pipeline facilities from natural gas to crude oil transmission service. The U.S. portion of the project includes approximately 1,730 kilometres (1,070 miles) of new pipeline construction.
In January 2006, TransCanada announced it had secured firm, long-term commitments from shippers for transportation of 340,000 barrels of crude oil per day with an average duration of 18 years. Shippers have also expressed strong interest in a proposed extension of the Keystone Oil Pipeline south to the refining hub of Cushing, Oklahoma. A binding open season will be held on the Cushing Extension later in 2006.
As part of the transfer application, TCPL is also seeking approval to reduce the Canadian Mainline rate base by the net book value (NBV) of the transferred facilities and Keystone is seeking approval to add the NBV of the facilities to the Keystone Oil Pipeline rate base. The transfer application is the first of two major regulatory applications required to obtain approvals necessary to construct the Canadian portion of the Keystone Oil Pipeline. Keystone will apply to the NEB for a certificate of public convenience and necessity to construct the required new facilities later this year once environmental assessment work is completed in the summer of 2006.
Earlier this year, TransCanada filed with the U.S. Department of State an application for a Presidential Permit authorizing the construction, operation and maintenance of the cross-border facilities associated with the proposed Keystone Oil Pipeline. The pipeline will also require approvals from a variety of U.S. agencies at the state and local levels.
Public and stakeholder consultation, detailed environmental assessments and field studies, and further engineering work will continue throughout 2006. Construction is proposed to begin in late 2007, with commercial operations scheduled to commence by the fourth quarter of 2009.
To view a map of the proposed pipeline route and obtain other information about the Keystone Oil Pipeline, please visit the project web page at http://www.transcanada.com/keystone/index.html.
TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure. TransCanada’s network of more than 41,000 kilometres (25,600 miles) of pipeline transports the majority of Western Canada’s natural gas production to key Canadian and U.S. markets. A growing independent power producer, TransCanada owns, or has interests in, approximately 6,700 megawatts of power generation in Canada and the United States. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP.
FORWARD LOOKING INFORMATION
Certain information in this news release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in this information may differ from actual results or events. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability and price of energy commodities, regulatory decisions, competitive factors in the pipeline and power industry sectors, and the current economic conditions in North America. For additional information on these and other factors, see the reports filed by TransCanada with Canadian securities regulators and with the United States Securities and Exchange Commission. TransCanada disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
- 30 -
For further information, please contact:
(403) 920-7859 or Toll Free (800) 608-7859
Investor & Analyst Inquiries:
David Moneta/Myles Dougan