TransCanada Submits Keystone Pipeline Reroute Plan

By EDWARD WELSCH

CALGARY, Alberta—TransCanada Corp. TRP -0.58% submitted a reroute of its Keystone XL oil pipeline to the Nebraska state government Wednesday, moving a step closer to reviving the project after it was rejected by the U.S. government earlier this year.

The reroute will avoid an environmentally sensitive area in the U.S. Midwest state, and comes a day after Nebraska Gov. Dave Heineman signed a bill allowing the state’s review of the pipeline to continue.

Nebraska was a hot spot for protest against Keystone XL last year because of its path across the Sand Hills and the Ogallala aquifer. Getting the reroute approved by Nebraska will help ensure that TransCanada can move ahead with reapplication to the U.S. federal government.

A TransCanada spokesman said the company is waiting for the “right time” to reapply for a federal permit from the U.S. State Department, which rejected its initial application in January.

The reroute will add a 100-mile eastern detour around the Sand Hills to the 1,700-mile pipeline from Alberta to the Texas coast of the Gulf of Mexico.

If approved, the $7.6 billion pipeline would send up to 830,000 barrels of crude a day from Canada and the western U.S. to refineries on the Gulf Coast. TransCanada has said the pipeline could begin flowing by 2015, about a year later than it had planned before the rejection of the first application.

President Barack Obama has said the U.S. is open to reviewing Keystone XL, if TransCanada reapplied for a permit. A decision wouldn’t be made before the U.S. presidential election in November.

The rejection of the first Keystone XL application came as the oil pipeline became embroiled in a political battle in Washington. Reacting in part to the protests in Nebrasaka, the Obama administration late last year postponed a decision on the pipeline until early 2013.

Republicans then passed legislation forcing the State Department to make a decision on the pipeline by the end of February. The White House, saying that deadline didn’t give it enough time to review the project, rejected it.

Write to Edward Welsch at edward.welsch@dowjones.com

read more: http://online.wsj.com/article/SB10001424052702303425504577352651777168314.html

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