TransCanada Corp should push ahead with an $8 billion Keystone XL pipeline expansion after the state of Nebraska on Monday approved a route that would raise the cost of the controversial project, some shareholders said.
The approval quashed the last regulatory hurdle for the nearly decade-old project, but the Nebraska Public Service Commission denied TransCanada’s preferred route. That opened the door to potential delays and emboldened activists who said they would try to kill the project through protests.
TransCanada has so far spent $3 billion on the 1,179-mile pipeline and has said it would make a final investment decision by December, based on commercial support and Nebraska’s regulatory approval. More clarity on the company’s strategy is expected at its investors day next Tuesday.
“There might be a lot of court cases and what-have-you to go, but on the whole I’d like to see them go ahead with this project,” said Manash Goswami, senior vice president and portfolio manager at First Asset ETFs, who echoed the views of other TransCanada shareholders.
While oil does not form the bulk of TransCanada’s portfolio, some analysts estimate the Alberta-Nebraska Keystone XL project has the potential to contribute up to 10 percent to the company’s C$55.5 billion ($43.4 billion) market value.
Source: Reuters
