By Rod Nickel and Shanti S Nair
(Reuters) – TC Energy Corp sees too much uncertainty to commit immediately to the long-delayed Keystone XL oil pipeline project, company executives said on Thursday, even as TC prepared for construction.
The Canadian company has recently cleared some regulatory hurdles, including receiving a fresh environmental impact statement from the U.S. State Department. But it needs permits to access U.S. water crossings from the U.S. Army Corps of Engineers and resolution to a court challenge of the project’s 2018 U.S. presidential permit before making a final investment decision, Executive Vice-President of Liquids Pipelines Paul Miller said on a quarterly conference call.
“This is a very compelling project with benefits for many parties if we can get this done,” TC Chief Financial Officer Don Marchand said. “If we can get comfort that the risk-reward proposition is attractive to us, we will proceed. If we can’t line all that up, the project will stay where it is.”
The $8 billion Keystone XL project would carry 830,000 barrels per day of crude from Alberta to the U.S. Midwest. It has been delayed for more than a decade by opposition from landowners, environmental groups and tribes, and after former U.S. President Barack Obama rejected the project.
TC Chief Executive Russ Girling said the company has acquired nearly all right of way in the United States for the pipeline, which would run from Alberta through Montana, South Dakota and into Nebraska.
The company has previously said it planned to start mobilizing heavy construction equipment in February.
TC Energy fell slightly short of quarterly profit estimates, hit by a lower contribution from its Canadian natural gas pipelines and a decline in its existing Keystone pipeline volumes.
The hit to Keystone volumes comes after a leak in North Dakota in late October temporarily shut down the pipeline.
The company’s earnings from its oil pipelines plunged 33% to C$355 million ($267.58 million) in the fourth quarter, while profit from its Canadian natural gas pipelines fell 29% to C$321 million.
The Calgary, Alberta-based company’s comparable earnings rose to C$970 million ($731 million) in the quarter, from C$946 million a year earlier.
Excluding items, TC Energy earned C$1.03 per share, below analysts’ average estimate of C$1.04, according to IBES data from Refinitiv.
Revenue fell 16.4% to C$3.26 billion.
Separately, the company said it approved two new expansion projects worth C$1.3 billion on its natural gas pipeline systems.
TC Energy shares closed slightly higher in Toronto.
(Reporting by Rod Nickel in Winnipeg, Manitoba, and Shanti S Nair in Bengaluru; Editing by Maju Samuel and Matthew Lewis)
