Canada’s Pipeline Transportation System 2016

TransCanada Keystone Pipeline GP Ltd.’s Keystone Pipeline

Table 8.2.1: TransCanada Keystone Pipeline GP Ltd.’s Keystone Pipeline

Commodity and NEB Group	Crude oil (Group 1)
Operating capacity	94 000 m³/d (591 Mb/d)
Average utilization 2015	94%
Primary receipt points	Hardisty, AB
Primary delivery points	Wood River and Patoka, IL, Cushing, OK,
Net Plant 2015 (millions)	$2,090
Revenues 2015 (millions)	$466
Abandonment Cost Estimate and Collection PeriodNote a	$236 million; 25 years

Overview

The Keystone Pipeline (Keystone) transports crude oil from Hardisty, AB to refining markets in the U.S. Midwest and U.S. Gulf Coast. The Canadian leg runs from Hardisty east to Manitoba, where it crosses the border into North Dakota and continues south across South Dakota and Nebraska. At Steele City, NE, the pipeline has two branches: one runs east through Missouri to Wood River and Patoka, IL, and the other runs south to Cushing, OK. At Cushing, it links to another pipeline (Cushing Marketlink) which delivers crude oil to the U.S. Gulf Coast. Keystone operates under long-term contracts with its shippers for 90% of its capacity.

Sources: NEB

Text version of this map

This map provides an overview of the Keystone Pipeline System.

Commercial operations commenced for the first phase of Keystone in July 2010, providing 69 200 m³/d (435 Mb/d) of capacity from Hardisty, AB to the Wood River and Patoka market hubs. The second phase became operational in February 2011, extending the system to Cushing, OK and adding 24 800 m³/d (156 Mb/d) of capacity. This increased total system export capacity to 94 000 m³/d (591 Mb/d).

Key Developments

In September 2008, TransCanada applied to the U.S. Department of State for a Presidential Permit for the Keystone XL project, and in November 2015, this application was denied. TransCanada has since challenged the decision and has stated that it and its shippers remain committed to the project.

Utilization

Figure 8.2.1 shows throughput on Keystone for 2010-2015. Throughput averaged about 84 300 m³/d (531 Mb/d) in 2014 and about 88 300 m³/d (556 Mb/d) in 2015.

Figure 8.2.1: Keystone Throughput vs. Capacity

Source: TransCanada, NEB

Tolls

Figure 8.2.2 shows the Keystone benchmark toll (10-year committed toll for light petroleum from Hardisty, AB to the U.S. border for ultimate transportation to Cushing, OK) along with the GDP deflator (normalized) for 2011-2015. The benchmark toll increased steadily from 2011 to 2015. In 2012, the benchmark toll rose by 4%, reflecting an adjustment for final project costs. The toll increased by 6% in2013 and by 4% in 2014, each as a result of a change in operating, maintenance and administration costs.

Figure 8.2.2: Keystone Benchmark Toll

Source: NEB

Financial

TransCanada Keystone Pipeline GP Ltd. is owned and operated by TransCanada Corporation. Throughput increased over the past few years and revenues and returns have also increased. Keystone operations represent approximately 20% of TransCanada Corporation’s earnings. TransCanada Corporation’s financial ratios continue to be stable and credit ratings for TransCanada Pipelines Ltd. are investment grade. In 2015, a $194 million impairment charge was recorded in connection with the denial of the U.S. Presidential Permit for the Keystone XL pipeline.

Date modified:

2022-01-28