TransCanada says it wants to begin work on the 435 mile section of pipeline from Cushing, Oklahoma to refineries here in the Houston area and in Port Arthur. Because it doesn't cross a border, the company says it is confident the segment won't need State Department approval and will be much easier to get started.
Andrew Lipow is an analyst with Lipow Oil Associates here in Houston.
"I think that the market says there's a need for a pipeline to move oil from the Midwest to the Gulf Coast and they're proceeding with that part of project. In their original plans for the Keystone XL line had they gotten permit approval
earlier this year or late last year, they were going to proceed with the Cushing to Texas segment first and then construct
the Canadian to U.S. segment later."
TransCanada says the Cushing to Gulf Coast segment will cost $2.3 billion and if approved, could be in service late next year.
"Gulf Coast refiners will be able to access that cheaper, mid-continent oil. The mid-continent producers will be able to ramp-up their production sooner and as a result we will reduce the amount of imports that are coming in to Gulf Coast refiners."
TransCanada says it's currently studying a different route for the section of pipeline from Calgary to Cushing that would go around the sensitive Sandhills region in Nebraska. The pipeline, if approved, would move tar sands oil from Canada to be refined here in Texas.