TransCanada seeks approval to convert gas lines into crude lines

Calgary (Platts)--6Jun2006

Calgary-based TransCanada said Tuesday it has filed an application with
the National Energy Board for approval to transfer part of its natural gas
transmission facilities in Canada to its Keystone oil pipeline project.

The Keystone project is a proposal to build a 2,960km (1,830-mile)
pipeline that will have a capacity to ship about 435,000 b/d of crude oil
from Hardisty, Alberta, to US Midwest markets at Wood River and Patoka,
Illinois. The pipeline can be expanded to a nominal capacity of 590,000 b/d
with additional pumping stations.

The Canadian portion of the project involves the construction of about
370 km of new pipeline and the conversion of some 860km of the existing
TransCanada Canadian Mainline pipeline facilities from natural gas to crude
oil transmission service. The US portion includes about 1,730km of new
pipeline construction. Construction of the Keystone line is expected to begin
in late 2007, with commercial operations scheduled to commence by the fourth
quarter of 2009.

In January, the company secured shippers' commitments to transport
340,000 b/d of crude for 18 years. TransCanada is to conduct an open season
seeking binding commitments on a proposed extension of the Keystone crude line
from Illinois to Cushing, Oklahoma, later this year.

Earlier this year, TransCanada filed with the US Department of State for
an application for a Presidential Permit authorizing the construction,
operation and maintenance of the cross-border facilities associated with the
proposed Keystone project.

--Esa Ramasamy, esa_ramasamy@platts.com

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