CALGARY — TransCanada Corp. (TSX:TRP) has reached a project labour agreement with U.S. unions for construction on a “significant portion” of the proposed US$7-billion expansion of its Keystone pipeline to the U.S. Gulf Coast.
The agreement, which is common in the U.S. before construction on large scale infrastructure projects, was negotiated with six unions.
Calgary-based TransCanada said Tuesday the agreement will create 13,000 jobs during construction and covers a portion of the pipeline expansion that runs through Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.
The Keystone Gulf Coast Expansion Pipeline Project, nicknamed Keystone XL, will cut on a diagonal across Montana, South Dakota and Nebraska before jutting south to Port Arthur, Texas.
The proposed Keystone XL pipeline will have a significant impact on the North American economy through the thousands of manufacturing and construction jobs it is creating, TransCanada president and CEO Russ Girling said in a news release.
“This project will also play an important role in linking a secure and growing supply of Canadian crude oil with the largest refining markets in the United States, significantly improving North American energy security,” he added.
Vincent Giblin, general president of the International Union of Operating Engineers, called the project, which spans five states “ambitious.”
“(It) will unequivocally help remedy the struggles of our country’s working families,” he said.
The expansion project is expected to increase the capacity of the Keystone Pipeline System from 590,000 barrels per day to about 1.1 million barrels.
Keystone XL has received approval from Canadian regulators, and is now awaiting the go-ahead from the U.S. State Department.
TransCanada has withdrawn an application before the U.S. State Department that would have allowed it to pump oil from Alberta’s oilsands to refineries along the Gulf of Mexico at a higher pressure than current regulations allow.
Many in the United States were concerned that the higher pressure, combined with thinner steel TransCanada was proposing, would be unsafe.
Earlier this summer, the U.S. Environmental Protection Agency questioned the need for the pipeline. It also said the original environmental impact assessment didn’t consider the effect of importing oilsands bitumen on U.S. climate change policies.
Shares in TransCanada were up 11 cents at $38.36 in afternoon trading Tuesday on the Toronto Stock Exchange.