ConocoPhillips and TransCanada Corp. on Tuesday announced that ConocoPhillips acquired a 50 percent ownership interest in the Keystone Oil Pipeline. A previously signed Memorandum of Understanding committed ConocoPhillips to ship crude oil on the pipeline and gave the right to acquire up to 50 percent ownership interest.
"ConocoPhillips is pleased to sign this agreement with TransCanada and take an important step in providing another reliable source of transportation for Canadian crude oil to United States refineries," said Jim Mulva, chairman and chief executive officer of ConocoPhillips. "The Keystone Pipeline will play a significant role in integrating ConocoPhillips’ upstream and downstream assets and ensure market access for growing Canadian production."
"The partnership between ConocoPhillips, a global integrated oil and gas producer and refiner, and TransCanada, a leading North American energy infrastructure company, reflects the strategic benefits of two energy entities working together," said Hal Kvisle, TransCanada president and chief executive officer. "The partnership provides us with a platform for developing future crude oil pipeline opportunities."
Affiliates of TransCanada Corporation will be responsible for constructing and operating the 3,456-kilometer (2,148-mile) Keystone Pipeline, which will be capable of delivering 590,000 barrels per day of crude oil from Hardisty, Alberta, to U.S. Midwest markets at Wood River and Patoka, Illinois, and to Cushing, Oklahoma. Initial deliveries to Patoka are expected to begin in late 2009. Keystone has secured firm long term contracts of 495,000 barrels per day with an average duration of 18 years.