27 February 2013 17:09 [Source: ICIS news]
TORONTO (ICIS)--The case for the ?xml:namespace>
The 1,900km project, first proposed in 2008, met with strong opposition from environmentalists worried about emissions from Canada's heavy oil sands crudes. US President Barack Obama last year deferred a final decision on the pipeline's approval.
Patricia Mohr, commodities specialist at Toronto-based Scotiabank, said in a research note that arguments in favour of the project remain compelling.
Second, the project would improve overall
Third, there was a “critical need” for more pipeline capacity and infrastructure for
“One-third of Keystone XL pipeline capacity will actually be available for US producers,” Mohr said.
Keystone XL would, via
As such the project would help narrow currently wide discounts on Western Canadian Select (WCS) heavy oil, as well as the discount on Bakken oil, Mohr said.
The WCS discount off West Texas Intermediate (WTI) was at “a staggering” $36.94/bbl in February, she said. WCS heavy oil should be priced close to similar-quality Mayan crude from
Following approval, Keystone XL's construction could take 18-24 months, meaning that the project could be in service by late 2014, at the earliest, Mohr said.
However, regardless of Keystone XL,
Mohr pointed to plans for a new pipeline from
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