TransCanada Withdraws Bid to Boost U.S. Pipe Pressure After Enbridge Spill

TransCanada Corp. today withdrew an application to run its proposed Keystone XL pipeline to the U.S. Gulf Coast from Canada’s oil sands at higher-than-normal pressure amid public safety concerns.

The lower pressure will reduce Keystone’s maximum deliverable volume to 700,000 barrels daily from 900,000 when it is completed, Robert Jones, vice president of the pipeline project, said in an interview. The Calgary-based company had asked the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration to allow it to operate the line at a maximum of 1,440 pounds per square inch, 10 percent more than the standard rate of 1,308 pounds.

“We are trying to be responsive to public concerns,” Jones said. Withdrawing the application now will allow the pipeline company to demonstrate the safety of the line when it starts operating, he said.

U.S. politicians and environment groups have raised concerns about the 1,980-mile (3,185-kilometer) project in the wake of the BP Plc well blowout in the Gulf of Mexico and a leak in a pipeline operated by Canadian rival Enbridge Inc. in Michigan. The line would provide a direct link to refineries on the U.S. Gulf Coast from Canada’s oil-sands through TransCanada’s $12 billion Keystone system.

The system will use stronger-than-required pipe that would be able to handle the higher pressures, Jones said. The company expects the initial capacity to be adequate for shippers and refiners.

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net.

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