Stockwatch – TransCanada yet Again Forced into Upping Cost Projections for its Keystone XL Project

Stockwatch – Calgary-based pipeline operator TransCanada Corporation (TSE:TRP, Mkt cap 39.78B, P/E 23.00, Div/yield 0.48/3.42, EPS 2.44, Shares 708.56M) says the cost of its Keystone XL project continues to escalate, with new estimates hitting C$8 billion.

The project to build the extensive pipeline network, which would carry 830,000 barrels per day of Canadian crude from Alberta’s oil sands to the Gulf Coast, continues to run into problems as it tries to see off environmental opposition.

Stockwatch TransCanada Construction Keystone pipeline

Stockwatch – TransCanada – Construction of the Keystone pipeline

TransCanada said it is these delays which have forced it into upping its initial cost projection of C$5.4 billion. The firm first outlined its plans some six years ago – yet there are still no signs of federal consent.

However, Market Business News suggests that things could change, with the Republicans making significant gains and winning control of the Senate after the U.S. mid-term elections. The results, it claims, could see lawmakers force President Barack Obama to make the decision.

Russ Girling, CEO of TransCanada, would not be drawn into predicting what will happen after the elections concerning the project – just that he hopes a decision will be made sooner rather than later.

“Suffice to say that we are supportive of any process that can help advance the decision on the project given that the environmental review is completed and at this point in time we are just sitting and waiting for someone to say go,” he added.

Canada’s second largest pipeline company is pushing another project at the same time, having just filed for regulatory approval of its C$12 billion Energy East pipeline.

If it is given the green light, Energy East would be North America’s largest and longest crude line, crossing six Canadian provinces and carrying 1.1 million barrels a day.

Stockwatch – TransCanada Corp reported 3rd quarter 2014 earnings of $0.63 per share. This result was in-line with analysts’ consensus and was unchanged from last year’s 3rd quarter results.

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