TransCanada and ConocoPhillips are planning to expand the Keystone crude oil pipeline system in order to increase its capacity from 590,000 barrels to approximately 1.1 million barrels per day. The pipeline will connect a growing supply of Canadian crude oil with a rising U.S. demand for energy by 2012.
The expansion includes a 1,980-mile, 36-inch crude oil pipeline starting at Hardisty, Alberta, and extending south to a delivery point near terminals in Port Arthur, Texas. The project includes adding pumping facilities, so the Keystone pipeline system could eventually expand its capacity from 1.1 million to 1.5 million barrels per day, according to TransCanada.
The 435 miles of new pipeline extending from Cushing, Okla., to Port Arthur, Texas, might also include a 47-mile pipeline from Liberty County, Texas to Houston, Texas, depending on shipper support.
The proposed Canadian portion of the pipeline is 327 miles in length and will extend from Hardisty to Monchy, Saskatchewan. The U.S. portion will begin at Morgan, Mont., and travel through South Dakota and Nebraska, which is 836 miles. The pipeline will then connect to the proposed 296-mile Keystone XL expansion that will begin in Steele City, Neb.
Bakken Marketlink Project
On Sept. 13, 2010, TransCanada launched a binding open season for Keystone and Keystone XL capacity geared toward producers in the growing Bakken Shale play in the Williston Basin. TransCanda has proposed allocating 100,000 b/d of contract capacity on Keystone from Baker, Montana, to Cushing, Okla., and on Keystone XL from to Port Arthur, Texas. In effect, Bakken producers would have a direct link to the Cushing, Okla., oil storage hub and to Gulf Coast refining facilities.
TransCanada proposes building piping, booster pumps, meter manifolds, and two terminals -- one at Baker and another at Cushing. Two of the three storage tanks at Baker would each be capable of storing 250,000 barrels of oil from third-party pipelines and terminals. The third, 100,000-barrel-capacity tank at Baker would be used for operational purposes. The two tanks at the Cushing terminal, each a capacity of 250,000 barrels, would be used for delivery batch accumulation and would link to third-party pipelines and tank farms.
The estimated cost of facilities proposed for the Bakken Marketlink Project is $140 million, and TransCanada anticipates the project to begin service in the first quarter of 2013. The open season period is set to expire on November 10, 2010.