U.S. President Donald Trump has approved the existing Keystone pipeline to ship 29% more Canadian crude into the U.S. Midwest and Gulf Coast after TC Energy Corp.'s decade-old expansion project was stalled again this month by legal hurdles.
Trump issued a new presidential permit for the base Keystone line, allowing TC to boost capacity by 170,000 bbl/d to 761,000 bbl/d, TC spokesman Terry Cunha said July 30. The first 50,000 bbl/d increment begins flowing next year.
The additional Canadian crude oil on the line will help meet growing U.S. refinery demand, Chief Executive Russ Girling said on a conference call.
When Trump came to office, he revived TC's proposed Keystone XL pipeline, which has been delayed by opposition from landowners, environmental groups and tribes. It would give Canada expanded access to its top oil market after its existing pipelines ran full in recent years.
The U.S. Supreme Court reinforced this month a lower court ruling that blocked a key environmental permit, blocking substantial U.S. construction.
TC expects Keystone XL to enter service in 2023. Construction is underway in Canada, and TC is working on a revised 2020 U.S. work plan focusing on areas that have all permits and approvals, Girling said.
TC posted a 6% fall in second-quarter comparable profit, partly hurt by a modest drop in uncontracted Keystone volumes.
Steep declines in oil and gas production have hurt pipeline operators.
But TC Energy said it did not expect the pandemic to have any material negative impact on 2020 earnings as most come from long-term contracts.
Comparable earnings fell to C$863 million (US$643.31 million), in the quarter, from C$924 million a year earlier.
It reported earnings per share of 92 Canadian cents, in line with analysts' estimates.
Net income rose to C$1.3 billion, or C$1.36 per share, including a C$408 million gain partly related to selling a 65% stake in the Coastal GasLink project. (US$1 = C$1.3415)
U.S. energy firms cut the number of oil and gas rigs over the past week to a record low for a 14th week even as higher oil prices prompt some producers to start drilling again.
The move comes as the November presidential election looms and the Trump administration aims to complete several more deregulatory actions on the spring Unifed Agenda, a list of its policy priorities.
The U.S. oil and gas rig count fell by four to an all-time low of 247 in the week to Aug. 7, according to data from energy services firm Baker Hughes Co.