CALGARY – TransCanada Corp. (TSX:TRP) said Friday its controversial and long-delayed Keystone XL pipeline will likely be in service in the second half of 2015 — months later than its previous estimate as the company continues to await U.S. government approval for the project.
TransCanada had been sticking to its late 2014 or early 2015 start up target, though the later in the year a decision is announced, the harder it will be to meet that schedule.
It added that the estimated total cost of US$5.3 billion will increase depending on the timing of receiving a presidental permit from Barack Obama, who has signing authority on Keystone XL because the pipeline crosses the U.S. border.
The company said Friday it has spent US$1.8 billion so far on the project.
Keystone XL is only one of several megaprojects planned by TransCanada over the next three years, but it has been a target of environmental groups because of its connection with the oilsands industry.
TransCanada reported Friday it earned $446 million, or 63 cents per share, in its first quarter, up from 50 cents per share or $352 million in the first quarter of 2012.
Comparable earnings for the quarter, which exclude unrealized gains and losses from derivatives, were $370 million or 52 cents per share, up slightly from $363 million or 52 cents per share a year ago.
Revenue was $2.25 billion, up from $1.9 billion in the first quarter of 2012.
Analysts polled by Thomson Reuters were on average expecting earnings per share of 54 cents and revenues of $2.1 billion.
The Obama administration rejected an earlier iteration of the Keystone XL project last year because of environmental concerns in Nebraska.
The company responded by breaking up the project into two parts and going ahead with the southern leg between Oklahoma and the U.S. Gulf Coast that did not require the presidential approval. It is expected to be complete later this year.
The U.S. State Department is weighing whether to award a permit for the more contentious northern part, which crosses the border and includes a reworked route through Nebraska to avoid sensitive ecosystems and water sources.
It issued a draft environmental report earlier last month that flagged no major concerns with the project. A final decision is expected some time later this year.
Critics have scoffed at the new route, saying it still poses a threat to the Ogallala aquifer and Sand Hills region. Some groups say the pipeline will enable major growth in the oilsands, which they say is a dirty source of crude that is a major contributor to climate change.
Meanwhile, the company has been looking to ship crude to Eastern Canadian refineries by converting part of its underused natural gas mainline to oil service.
New pipe would need to built between Quebec and Saint John, N.B., which is home to the huge Irving Oil refinery. Saint John is also home to a big deepwater port, from which crude can be exported via tanker.
Though TransCanada’s oil projects have been grabbing the most headlines lately, its core business involves shipping natural gas through its vast continental network. It also has several power generation assets.