TransCanada Plans to Seek U.S Approval for new Pipeline

The company behind the Keystone XL pipeline plans to ask the U.S. government to permit a new and different pipeline project.

Despite the yearslong fight over Keystone XL, TransCanada Corp. will apply to the U.S. State Department to build a 200-mile pipeline from North Dakota’s booming oil fields across the border into Canada to connect to another proposed pipeline, according to a person briefed on the plan.

In its earnings report Friday, the company will announce it is proposing the $600 million Upland Pipeline Project, which aims to transport up to 300,000 barrels a day of North Dakota crude to a connection in Saskatchewan, according to the person briefed on the plan. From there, the oil can flow on TransCanada’s planned Energy East pipeline, which aims to ship up to 1.1 million barrels of oil a day nearly 3,000 miles across Canada to refineries and ports along the country’s East Coast.

U.S. laws restrict American oil exports, but companies are generally allowed to sell crude to Canada if they apply for a license. U.S. oil exports to Canada have been on the rise in recent years. During the first 11 months of 2014, close to 106 million barrels of oil pumped in the U.S. was exported to Canada—more than double the volume exported in 2013, according to data from the U.S. Energy Information Administration.

The Upland pipeline is scheduled to go into service in 2018, subject to regulatory approvals, which includes a permit from the State Department to cross the U.S.-Canadian border, the person briefed on the plan said.

The announcement indicates TransCanada isn't backing down on its oil-shipping plans despite an increasingly political fight over Keystone XL. The U.S. House cleared legislation Wednesday approving the proposed pipeline, the latest—but not the last—twist in a saga that has escalated into a broad debate on the economy, energy production and climate change.