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‘Morale booster’: Canadian oil and gas relishes rare Keystone XL victory and Nova pipeline changes

‘Morale booster’: Canadian oil and gas relishes rare Keystone XL victory and Nova pipeline changes
Business
CALGARY — Back-to-back pipeline announcements from TC Energy Corp. are prompting celebrations from both oil and natural gas producers in Canada, who believe that a legal win for the Keystone XL pipeline and changes to the Nova natural gas pipelines will offer relief to the beleaguered industry.

In the same week that Ottawa announced construction would soon begin on the Trans Mountain oil pipeline expansion project, TC Energy said Friday that the Nebraska Supreme Court upheld the Keystone XL pipeline’s route approval by the state’s public utilities commission. The Alberta-to-U.S. Gulf Coast conduit is expected to move 830,000 barrels of oil per day once completed.

Hours earlier on Thursday night, TC Energy, the company previously known as TransCanada, reached an agreement with the Alberta government and domestic natural gas producers to change the way it operates the Nova gas transmission system, the province’s largest gas pipeline network.

The new deal will help stabilize the benchmark AECO natural gas prices and lift the sector that is currently fetching half the price realized in the United States — $1.16 per million British thermal units in the spot market, compared with US$2.28 in the United States.

The two announcements serve as a rare double dose of optimism for Canadian oil and gas companies, which have in recent years seen their share prices plummet to all-time-lows amid pipeline delays and domestic commodity prices regularly trading lower than international prices.

“People are starting to see more hope across the sector,” Explorers and Producers Association of Canada president Tristan Goodman said, adding that it’s been a long time since the local industry has seen two announcements for more pipeline space in under 24 hours. “This is a positive development.”

In Nebraska, the state’s supreme court ruled the appeals launched by landowners, Indigenous tribes and the Sierra Club “are without merit” and determined that the state’s Public Utilities Commission had the proper authority to approve the pipeline along an alternative to the company’s preferred route.

Opposition groups expressed their disappointment with the ruling and vowed to continue the struggle. “The fight to stop this pipeline is far from over,” Nebraska Sierra Club lawyer Ken Winston said in a release.
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