One of the major projects of TransCanada is building a 36-inch-diameter pipeline for crude oil with the starting point at Hardisty, Alberta and finishing with Steele City, Nebraska. The construction is dubbed as TransCanada Keystone XL and obtained its Presidential Permit on March 24, 2017. However, this pipeline project is off to a rocky start as the company doesn’t know when negotiations are going to come to a conclusion.
Despite Surprising Performance in Q1, Keystone XL Pipeline Project Benefits of Fewer Funds
On Friday, Russell Girling, the Chief Executive at TransCanada Corp, declared that negotiations for shipper commitment are entangled. Keystone XL pipeline project needs lower oil prices and special export routes to start off. On the other hand, the company has a weaker financial background that expected, despite a surprisingly good performance during the last quarter.
“A lot of water has gone under the bridge over the last seven or eight years since we’ve proposed that project.”
The purpose of this new construction is to boost the capacity of the old Keystone system. This network starts in the province of Alberta in Canada and extends all the way to the Gulf of Mexico. The administration of U.S. President Donald Trump has already given the pipeline project green light back in March.
TransCanada Intends to Take Advantage of Some Presidential Promises
On top of that, Girling claimed that construction plans might cost $7 billion less than previously projected. The company intends to redirect this substantial difference to other projects. However, Girling shared no information on these secondary ideas. Moreover, TransCanada relies on Trump’s promises of lower corporate taxes in U.S. to streamline its financial plan for Keystone XL even further.
Over the past financial quarter, TransCanada Corp doubled its earnings from natural gas pipelines. The achievement received support from last year’s acquisition of Columbia Pipeline Group for around $13 billion. Moreover, its Mexico production has also resulted in 162% improvement to C$118 million.
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