TransCanada Corp’s (NYSE: TRP) Keystone XL oil-sands pipeline has hit a hard roadblock with rejection by President Barack Obama.
The delay is a blow to the $7 billion project and the potential profit for shareholders. But TransCanada has not given up yet.
The rejection came after environmental scrutiny and protests. The initial path of the pipeline would cross through sensitive regions in Nebraska, and citizens were unhappy with this type of an invasion.
The President was under a harsh deadline to approve the pipeline, and though there is a chance for approval in the future, he would not do it without environmental support.
Officials from TransCanada have announced that the company will reroute the pipeline layout and reapply again for approval. They expect, with this new complication, that construction will be finished by 2014.
That is, if this plan even follows through.
TransCanada is still reviewing its options as far as the pipeline goes. Alex Pourbaix, president of the company’s oil pipeline sector, told the Financial Post:
“This company is not just Keystone XL, we are a $60 billion company. Keystone was such a significant capital project that the delay actually gives us an opportunity to advance a number of other projects.”
But another option for the company is to begin the project without crossing the international border. CEO Russ Girling said in an interview:
“I think that clearly…we are now open to amending or changing our plans to building this in segments.”
If parts are built in the United States first, the final step would be crossing the border into Canada where the oil-sands are. The company may then apply for that permit at a later date.
TransCanada was down 0.02% on Friday to $41.22.
That’s all for now,