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Keystone XL pipeline still seen vital to market

Keywords: Tags  Keystone XL pipeline, TransCanada, Harold Hamm, Continental Resources, Kurt Minnich, Pipe Logix, tar sands, Enbridge Northern Gateway


NEW YORK — TransCanada Corp.’s proposed Keystone XL pipeline remains a pivotal event in the energy tubulars market, according to most sources, even after the head of a natural resources company recently claimed that U.S. shippers no longer need the line.

"People are frustrated enough to be seeking alternatives, but that doesn’t make the viability go away," Kurt Minnich, manager of Tulsa, Okla.-based Pipe Logix LLC, told AMM.

While most material for the proposed 1,179-mile, 36-inch-diameter crude oil pipeline has already been produced, the project, if approved, is still expected to give the market a boost.

"It’s more mental. It’s not so much production- and logistics-based. This is the first intra-country pipeline that hasn’t been approved," one energy tubular market participant said.

The debate comes after Harold G. Hamm, chairman and chief executive officer of Oklahoma City-based Continental Resources Inc., reportedly said in an interview that the Keystone XL pipeline was no longer needed.

"Not for our Bakken (crude oil). And is it needed for the industry? I don’t think so ... not in the U.S.," he said, adding that "rail has been a big factor and, you know, proven to be a very effective way."

Continental Resources didn’t respond to a request for comment.

"There is still significant interest in moving Bakken crude to the Gulf Coast, and Keystone XL will provide that service to producers. As our chief executive officer said recently, we have a waiting list for customers interested in securing capacity on Keystone XL," a spokesman for Calgary, Alberta-based TransCanada told AMM in an e-mail response to Hamm’s comments.

He also pointed out that media reports went on to say that Continental Resources remains a shipper on the line despite the remarks.

On rail replacing pipelines, the spokesman said that it "may be a flexible, short-term solution but pipelines and Keystone XL, in particular, are more efficient from a safety, environmental and economic perspective."

While Keystone XL is still mired in red tape, Calgary-based Enbridge Inc. recently received approval for its Northern Gateway project, a line that would carry tar sands oil to Canada’s west coast for export to Asia ( amm.com, Dec. 20).


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