TransCanada, on behalf of the Keystone Pipeline Partnerships, announced on July 16, 2008 plans to expand the Keystone crude oil pipeline system from Western Canada to the U.S. Gulf Coast and provide additional capacity of 500,000 barrels per day into to the U.S. Gulf Coast in 2012.

The expansion is expected to cost approximately US$7.0 billion. When completed, the expansion will increase the commercial design of the Keystone Pipeline system from 590,000 barrels per day to approximately 1.1 million barrels per day, resulting in a total capital investment of approximately US$12.2 billion.

Plans to expand to the U.S. Gulf Coast follow successful negotiations with several prospective customers who have agreed, subject to regulatory approvals, to make shipping commitments of approximately 300,000 barrels per day to the U.S. Gulf Coast for an average term of 18 years during a binding open season which began on July 16, 2008. In addition, prospective shippers have also agreed to commit another 35,000 barrels per day to Wood River and Patoka, Illinois during a future open season expected in the third or fourth quarter of 2008. With these commitments, Keystone has now secured long-term commitments for approximately 830,000 barrels per day for an average term of 18 years. These commitments represent approximately 75 per cent of the commercial design of the system.

The Keystone expansion includes an approximate 3,200-kilometre (1,980-mile), 36-inch crude oil pipeline starting at Hardisty, Alberta and extending south to a delivery point near existing terminals in Port Arthur, Texas and, subject to shipper support, will include an additional approximate 80-kilometre (50-mile) pipeline lateral to the Houston, Texas area. With the addition of incremental pumping facilities, the Keystone Pipeline system could be further expanded from 1.1 million barrels per day to 1.5 million barrels per day.

During the binding open season period, which expires at noon (Mountain Time) on September 4, 2008, TransCanada, on behalf of Keystone, will accept binding bids from parties for firm transportation capacity for transportation of crude oil from Hardisty, Alberta to Port Arthur or Houston, Texas.

For more information, visit the Keystone expansion project web page. This page includes a summary of the open season documents and a map of the proposed pipeline corridor.