CANADIAN OILPATCH / PIPELINE NEWS
Express pipeline delays to cut TCPL's earnings
The Financial Post
ÿCALGARY -- Delays in construction of the $530-million Express crude oil pipeline to the U.S. will cut into profit at TransCanada PipeLines Ltd. next year.
ÿTransCanada, which jointly owns Express with Alberta Energy Co., expects earnings to drop by 3› to 5› a share because the pipeline won't be in service until early April 1997.
ÿ"We're two months later than expected because of regulatory delays, and a delay in refurbishing of the Platte system," said TCPL senior vice-president of finance Bob Hodgins.
ÿExpress is the first new Canadian pipeline to be built for oil exports in more than two decades.
ÿWhen completed, the 1,200-kilometre line will carry 172,000 barrels of crude a day from Hardisty, Alta., to Casper, Wyo. Oil will then flow into the existing Platte Pipeline, which Express bought earlier this year, to be delivered to the U.S. Midwest.
ÿ"This delay in the refurbishing of Platte will delay full flows for a period of some three to four months," Hodgins said.
ÿ"Platte is a 45-year-old pipeline," said TCPL's Express spokesman Scott Woronuik, who added that Express will have to reconnect 18 pumping stations, and refurbish and reline all Platte's storage tanks.
ÿHodgins said Express will have to pay Wyoming oil producers more than was anticipated if the price of crude goes down due to Express.
ÿ"The settlement we negotiated is that if they're adversely affected by the price of crude going through the state of Wyoming, then we have an amount we have to pay them over the next five years," Hodgins said.
ÿLocal producers still have one lawsuit outstanding against Express. The Independent Petroleum Association of Mountain States is currently suing U.S. federal regulators and Express, claiming that Express's crude will saturate the market, and cut prices by as much as US$3 a barrel.
ÿHodgins said Express received its U.S. presidential permit last month. |
