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TC Energy (TRP) Seeks Shipper Commitments for Keystone XL

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TC Energy Corporation (TRP - Free Report) announced the launch of a binding open season to seek shipper commitments for the movement of crude oil through the Keystone XL pipeline system from various receipt points located in Hardisty, AB, to Patoka, IL.

The binding open season procedure provides an opportunity for interested shippers to bid for capacity that is likely to be offered after the commencement of the pipeline services in about two years. Notably, the launch is being conducted despite upcoming American President Joe Biden’s pledge to suspend the pipeline’s permits to continue the construction.

Earlier, project opponents claimed that the production and extraction of oil from oil sands will release more greenhouse gases compared with mainstream oil production, which will increase the effects of global warming. Further, they added that the construction and operation of the pipeline involve risks associated with the water supply and the environment, including inhabitants, livestock and soil across its route. However, TC Energy continued the pipeline construction, following the Alberta government’s decision to make an ownership investment of $1.1 billion and ensure a project loan of $4.2 billion.

The company expects to free up the capacity of nearly 80,000 bbl per day of crude oil on the current base Keystone XL pipeline system once the barrels are moved to the expansion pipeline upon its completion. The present Keystone XL pipeline system is capable of transporting more than 590,000 bbl per day of oil export from Alberta to distillation markets in the Midwest and Gulf Coast of the United States. Importantly, the pipeline can append an additional capacity of 830,000 bpd of oil export from Alberta to Nebraska.

Notably, the project is expected to generate employment for skilled workers. TC Energy believes that the job creation and support from local investors would help convince Biden that Keystone XL fits into his “Build Back Better” agenda and plans to start operating in 2023.

Company Profile

Headquartered in Calgary, AB, TC Energy is a premier natural gas-focused midstream energy service provider. The company is also involved in other businesses, including power generation, natural gas storage, and crude oil pipelines.

Zacks Rank & Stocks to Consider

The company currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Exxon Mobil Corporation (XOM - Free Report) and Altus Midstream Company (ALTM - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy), and Suncor Energy Inc. (SU - Free Report) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Exxon is expected to see earnings growth of 582.8%, while Altus Midstream is likely to see earnings growth of 364.4%.

Suncor’s sales for 2021 are expected to increase 127.6% year over year.

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