TransCanada Corp , Canada's largest pipeline company, started a search on Thursday for customers for two million barrels of storage space it plans to build at a terminal at the start of its controversial Keystone XL oil pipeline in Alberta, Reuters reports. The company said the search, called a binding open season, will allow would-be shippers on the line to contract for space in the tank farm. The open season will last until March 22.
The storage hub at Hardisty, Alberta, 170 kilometers (105 miles) southeast of Edmonton, is the starting point of TransCanada's existing Keystone pipeline and its planned Keystone XL pipeline, which will take 830,000 barrels a day of Alberta oil sands crude to refineries in the U.S. Midwest and on the Gulf Coast.
The new space will further cement Hardisty as Canada's most important oil storage hub. It is the end point for major pipelines carrying rising volumes of bitumen produced in the oil sands and the starting point for major pipelines owned by TransCanada, Enbridge Inc and Inter Pipeline Fund .
Hardisty currently has about 17 million barrels of oil storage space in tanks and caverns, including 13.4 million barrels of merchant space leased to oil companies, refiners and commodity traders, according to Genscape, an oil-market intelligence company. It's also the pricing point for Western Canada Select heavy oil, the benchmark crude grade flowing from the oil sands.
The level of oil stored at Hardisty is closely watched by traders in the United States because it's an indicator of how much crude will eventually flow from Hardisty to the oil storage hub at Cushing, Oklahoma. Cushing is the pricing point for West Texas Intermediate crude, North America's benchmark oil price.
"Hardisty is important from a Canadian point of view but it's also a very good leading indicator for what will happen in Cushing," said Abudi Zein, a senior vice-president at Genscape. "Hardisty storage is the bellwether for Canadian supply into the midcontinent."
TransCanada currently has three 350,000 barrel tanks at Hardisty serving the 540,000 bpd Keystone line to Cushing, with all the capacity used by the company to backstop the pipeline's operations.
The new merchant space, which could be expanded beyond two million barrels if demand warrants, will be complete in 2015, when TransCanada plans to complete the northern leg of the 830,000 bpd Keystone XL line, which will also run from Hardisty to Cushing.
The company said earlier this week that it will build Keystone XL's southern segment by late 2013 to take up to 700,000 bpd from Cushing to Gulf Coast refineries as it looks to move forward on the controversial line, which has been bitterly opposed by environmentalists worried about spills and the expansion of oil production at the oil sands.
U.S. President Barack Obama earlier this year refused to grant permission for the complete project because environmental studies were not yet complete for parts of the route. But TransCanada said it plans to reapply for a permit.
TransCanada shares were down 17 Canadian cents to C$43.40 by midday on the Toronto Stock Exchange.
The storage hub at Hardisty, Alberta, 170 kilometers (105 miles) southeast of Edmonton, is the starting point of TransCanada's existing Keystone pipeline and its planned Keystone XL pipeline, which will take 830,000 barrels a day of Alberta oil sands crude to refineries in the U.S. Midwest and on the Gulf Coast.
The new space will further cement Hardisty as Canada's most important oil storage hub. It is the end point for major pipelines carrying rising volumes of bitumen produced in the oil sands and the starting point for major pipelines owned by TransCanada, Enbridge Inc and Inter Pipeline Fund .
Hardisty currently has about 17 million barrels of oil storage space in tanks and caverns, including 13.4 million barrels of merchant space leased to oil companies, refiners and commodity traders, according to Genscape, an oil-market intelligence company. It's also the pricing point for Western Canada Select heavy oil, the benchmark crude grade flowing from the oil sands.
The level of oil stored at Hardisty is closely watched by traders in the United States because it's an indicator of how much crude will eventually flow from Hardisty to the oil storage hub at Cushing, Oklahoma. Cushing is the pricing point for West Texas Intermediate crude, North America's benchmark oil price.
"Hardisty is important from a Canadian point of view but it's also a very good leading indicator for what will happen in Cushing," said Abudi Zein, a senior vice-president at Genscape. "Hardisty storage is the bellwether for Canadian supply into the midcontinent."
TransCanada currently has three 350,000 barrel tanks at Hardisty serving the 540,000 bpd Keystone line to Cushing, with all the capacity used by the company to backstop the pipeline's operations.
The new merchant space, which could be expanded beyond two million barrels if demand warrants, will be complete in 2015, when TransCanada plans to complete the northern leg of the 830,000 bpd Keystone XL line, which will also run from Hardisty to Cushing.
The company said earlier this week that it will build Keystone XL's southern segment by late 2013 to take up to 700,000 bpd from Cushing to Gulf Coast refineries as it looks to move forward on the controversial line, which has been bitterly opposed by environmentalists worried about spills and the expansion of oil production at the oil sands.
U.S. President Barack Obama earlier this year refused to grant permission for the complete project because environmental studies were not yet complete for parts of the route. But TransCanada said it plans to reapply for a permit.
TransCanada shares were down 17 Canadian cents to C$43.40 by midday on the Toronto Stock Exchange.