TC Energy says Keystone XL construction continuing despite U.S. court ruling

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CALGARY — Construction work on the Keystone XL pipeline is continuing apace despite a U.S. court ruling last month that invalidated a nationwide permit allowing pipelines to cross waterways, builder TC Energy Corp. said Wednesday.

The Calgary-based company filed a motion earlier this week to stay the order by a U.S. district judge that struck down the U.S. Army Corps of Engineers’ clean water permit, said Bevin Wirzba, senior vice-president of liquids pipelines for TC Energy.

The permit applied to a broad range of projects including Keystone XL but was found by the judge to have failed to adequately consider effects on endangered species such as the pallid sturgeon.

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“We have a number of options that we’re working with respect to curing both the regulatory and legal aspects of that,” said Wirzba on a conference call Friday to discuss first-quarter results.

TC Energy crews are ahead of schedule on building the Canada-U.S. border crossing, he said, adding they are also staging pipe and building work camps while studying ways to continue construction even if the ruling blocks U.S. river crossings along the 1,930-kilometre route from Alberta to Nebraska.

“Obviously, our preferred path is to march forward with the (construction) spreads we have identified for the U.S. but we do maintain that we will be able to complete a significant amount of work in the United States in 2020 even if it isn’t the same scope under which we began the year,” he said.

TC Energy announced March 31 it would go ahead with the US$8-billion Keystone XL pipeline after the Alberta government agreed to invest C$1.5 billion and provide a loan guarantee to jump-start the work.

It would carry up to 830,000 barrels per day of Canadian crude oil.

Opponents in the U.S. who have challenged the projects for years said the decision shouldn’t have been made during the economic and health crisis caused by the COVID-19 pandemic.

TC Energy expects slowdowns in some of its capital projects because of the virus but so far hasn’t seen any adverse affects on its financial results, said CEO Russ Girling on the call.

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“With approximately 95 per cent of our comparable EBITDA (adjusted earnings) coming from regulated or long-term contracted assets, we are largely insulated from the volatility associated with volume throughput and the commodity prices that are being experienced by many others,” he said.

The company formerly known as TransCanada reported a first-quarter profit of $1.15 billion, up from $1.0 billion a year ago.

Revenue for the three months ended March 31 totalled nearly $3.42 billion, down from nearly $3.49 billion in the same quarter last year.

TC Energy says its comparable earnings for first quarter 2020 were $1.1 billion or $1.18 per share compared with $1.0 billion or $1.07 per share in 2019.

This report by The Canadian Press was first published May 1, 2020.

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Companies in this story: (TSX:TRP)

 

Dan Healing, The Canadian Press


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