TransCanada Corp intents to seek permission from the US government for its plan to construct a 200-mile pipeline from North Dakota to Canada.
According to a person familiar with the matter the Canadian pipeline company will unveil its plan later on Friday as it reports its financial performance.
The new project is valued at $600 million and it will be able to transfer up to 300 000 barrels per day. The pipeline is projected to connect North Dakota’s oil operations with Saskatchewan, where it will attach to TransCanadas future Energy East pipeline, the Wall Street Journal said, citing the person briefed on the matter.
The Energy East pipeline is expected to cover almost 3 000 miles of Canadian territory, with the capacity to transport a maximum of 1.1 million barrels of oil a day.
Overall the new project is aimed at delivering North Dakota oil to Canadas refineries and seaports spread across the East Coast.
Under US law, companies are forbidden to export crude produced in the US. However, companies can still transfer oil to Canada, if they receive a license.
Companies have been showing increased interest towards exporting US-pumped oil to Canada, with volume almost doubling during the past year.
The plan dubbed “Upland Pipeline Project” is expected to start operating in 2018, should it receive all needed approvals from regulators, including the US Department of States.
The companys latest project is yet another step in the right direction for TransCanadas oil-shipping plans. However, its Keystone XL project is triggering a lot of political disagreements in the US.
On Wednesday the White house approved the construction of the pipeline with 270-152 vote. However, President Barrack Obama is expected to veto the legislation as he has repeatedly said.
Mr. Obama has said that he is not going to approve the bill until the State Department has finished with its review of Keystone XL.
The project has been under observation since 2008 and although the US authority has no deadline to finish its review it is in the final stages of it.
The prolonged process will most likely cost the company as the project is now valued at $10 billion, double its initial price. So far TransCanada has spent more than $3 billion on the project.
TransCanada gained 0.29% on Thursday and closed at C$58.50 in Toronto, marking a one-year increase of 19.07%. The company is valued at C$41.46 billion.
According to the Financial Times, the 14 analysts offering 12-month price targets for TransCanada Corporation have a median target of C$61.00, with a high estimate of C$68.00 and a low estimate of C$52.13. The median estimate represents a 4.27% increase from the last closing price.
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