Jan 20, 2011 1:40 PM by Associated Press/Q2 News
BISMARCK, ND - TransCanada Corp. says it has secured enough contracts with U.S. oil shippers to allow capacity on its proposed oil pipeline from Canada to the Gulf of Mexico.
The Calgary-based company said Thursday it secured contracts totaling 65,000 barrels a day from the rich Bakken Formation in North Dakota and Montana.
The company had faced political pressure to let U.S. oil companies tap into the Keystone XL pipeline that would cross Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.
TransCanada says its proposed Bakken Marketlink pipeline would meet with the Keystone XL pipeline in Baker, Mont.
The Keystone XL pipeline needs a permit from the State Department because it would cross the U.S.-Canada border in carrying Canadian oil to the U.S. Gulf Coast.
(Copyright 2011 by The Associated Press. All Rights Reserved.)
MT Governor Brian Schweitzer reaction: Earlier today TransCanada announced a positive conclusion to its Montana On-Ramp "open season" by entering into firm term contracts with independent oil producers. According to TransCanada, 65,000 barrels of crude oil per day will be shipped through a new Baker, Montana on-ramp to be constructed as part of the Keystone XL pipeline project. The approximate cost of the on-ramp project will be $100 million dollars, which is in addition to the $1 billion estimate cost to construct the Montana portion of the Keystone XL pipeline. The on-ramp will add about $2 million annually of property tax revenue in Fallon County.
"This is great news," said Governor Schweitzer. "Montana oil producers have been absorbing discounted value for their oil due to a lack of pipeline capacity. This on-ramp removes a long time pipeline bottleneck and provides new market access for Montana and North Dakota producers. This region is the only region in America that has increased its oil production. We have been doing our fair share to reduce our dependency on foreign oil, but, in the past, have been economically penalized by having to accept lower than market value for our crude oil products. Now we will have the infrastructure to efficiently get our oil to domestic refineries. This is a tremendous opportunity for Montana producers to get better value for their oil."
19 hours ago