Map of the Keystone Pipeline and Keystone XL system as originally envisioned. The solid lines mark the Keystone Pipeline, already in service; the dotted lines mark the originally planned Keystone XL expansion project. Subsequent to the President’s denial of the required cross-border permit, TransCanada is proceeding with the intra-US Cushing-to-Gulf portion (circled) and is reworking the application and the routing for the cross-border portion. Map: TransCanada. Click to enlarge.

The company also informed the DOS that what had been the Cushing-to-US-Gulf-Coast portion of the Keystone XL Project has its own independent value to the marketplace and will be constructed as a stand-alone Gulf Coast Project, which would be outside of the Presidential Permit process.  The approximate cost is US$2.3 billion and subject to regulatory approvals, TransCanada said it anticipates the Gulf Coast Project to be in service in mid- to late 2013.

The existing Keystone Pipeline is a 3,460-kilometer (2,150-mile) pipeline that transports crude oil from the oil sands in Alberta to markets in the American Midwest at Wood River and Patoka in Illinois, and at Cushing, Oklahoma.

Cross-border Project. TransCanada will continue to work collaboratively with the State of Nebraska on determining an alternative route for Keystone XL that avoids the Sandhills.  TransCanada has been working on assessing the routing in Nebraska since November 2011, following the State Department’s notice to delay a decision on a Presidential Permit until an adjusted route that avoids the Sandhills was developed.

Our application will include the already reviewed route in Montana and South Dakota. The over three year environmental review for Keystone XL completed last summer was the most comprehensive process ever for a cross border pipeline.  Based on that work, we would expect our cross border permit should be processed expeditiously and a decision made once a new route in Nebraska is determined.

—Russ Girling, TransCanada’s president and CEO

Gulf Coast Project. The pipeline from Cushing to the Gulf Coast will enable producers in states such as Oklahoma, Texas, North Dakota and Montana to move their production to the large refining market at the Gulf, TransCanada said.

White House Press Secretary Jay Carney issued a statement in response, saying that President Obama welcomed the news that TransCanada plans to build a pipeline to bring crude oil from Cushing, Oklahoma, to the Gulf of Mexico.

As the President made clear in January, we support the company’s interest in proceeding with this project, which will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight year high. Moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production. We look forward to working with TransCanada to ensure that it is built in a safe, responsible and timely manner, and we commit to take every step possible to expedite the necessary Federal permits.

Separately, TransCanada gave the State Department advance notice of its intention to submit a new application for the cross-border segment of the Keystone XL pipeline, from Canada to Steele City, Nebraska, once a route through Nebraska has been identified. House Republicans forced a rejection of the company’s earlier application in January, by not allowing sufficient time for important review or even the identification of a complete pipeline route. But as we made clear, the President’s decision in January in no way prejudged future applications. We will ensure any project receives the important assessment it deserves, and will base a decision to provide a permit on the completion of that review.

—White House Statement