TransCanada Corp (TRP) and Phoenix Energy Holdings Ltd. have announced a proposal to build a C$3 Billion pipeline project in northern Alberta. Named the Grand Rapids Pipeline, it will carry crude oil and diluent (a kind of thinner to help the crude flow freely through the pipelines) from the Athabasca oil sands northwest of Fort McMurray 500 km south to the Edmonton-Hartland area. The pipeline will help fill the increasing need for oil transportation infrastructure surrounding the even growing oil sands regions of northern Alberta.
The routing of the Grand Rapids Pipeline has yet to be finalized, with specific concerns relating to the environment, aboriginal and stakeholder input, as well as economics and land use still to be addressed. If the project is granted regulatory approval next year, TransCanada expects to be transporting as much as 900,000 barrels of crude oil plus over 300,000 barrels of diluent per day by early 2017.
The proposed pipeline will be a 50/50 joint ownership between TransCanada and Phoenix, together officially owned and operated as Grand Rapids Pipeline Limited Partnership, with TransCanada maintaining the pipeline while Phoenix ships the oil and diluent on it.
TransCanada operates over 59000 km of natural gas and oil pipelines in North America, as well as having a hand in generating over 10,000 megawatts of power. The Calgary based company is currently locked in a bitter dispute over the path of their Keystone XL pipeline, which will carry crude oil from Hardisty, Alberta nearly 1900km south to Steele City, Nebraska. The cross-border pipeline has many unique challenges still to overcome, as election politics and landowners continue to hold back its progress.
TransCanada Corp’s stock price barely increased on the news, seeing a rise of only 0.50 cents per share, or 1.12% increase, closing at $44.90 per share today. The 52 week low for TransCanada Corp is $39.25, and the 52 week high is $46.29. TRP has a current dividend yield of 3.92%.
Disclosure: I hold shares of TransCanada Corp. (TRP)