Pipeline Profiles: Keystone Pipeline

Pipeline system and key points

Updated December 2017

The Keystone pipeline system is owned by TransCanada Keystone Pipeline GP Ltd. and was put in service in 2010. The Keystone pipeline transports crude oil from Hardisty, Alberta to refining markets in the U.S. Midwest and U.S. Gulf Coast. The Canadian portion runs from Hardisty east across Saskatchewan and Manitoba, before turning south and crossing the Canada-U.S. border near Haskett, Manitoba into North Dakota.

The pipeline continues south across South Dakota to Steele City, Nebraska, where the pipeline has two branches: one runs east through Kansas and Missouri to delivery points at Wood River and Patoka, Illinois, and the other runs south delivery points located at Cushing, Oklahoma and Houston and Port Arthur, Texas. At Patoka, Keystone delivers crude oil to the Plains terminal which facilitates delivery to local refineries via third party pipelines.

Official Board documents related to the construction, operation and maintenance of the Keystone pipeline can be found here: Keystone pipeline regulatory documents [Folder 418396].

Map – Keystone Pipeline

Source: NEB

Text version of this map

This map provides an overview of the Keystone Pipeline System.

Throughput and capacityFootnote 1

Updated December 2017

Open data can be freely used, modified and shared by anyone for any purpose. The data for these graphs are available here.

Tolls

Updated December 2017

A toll is the price charged by a pipeline company for transportation and other services. Tolls allow pipeline companies to safely operate and maintain pipelines. Tolls also provide funds for companies to recover capital (the money used to build the pipeline), pay debts, and provide a return to investors. The interactive graph below shows the tolls for the 10-year committed toll for light petroleum from Hardisty, Alberta to the U.S. border (for ultimate transportation to Cushing, Oklahoma) since 2010.

Keystone negotiated its committed tolls with shippers through open seasons. Keystone shippers hold long-term contracts for about 90% of the pipeline's capacity. Committed toll levels on Keystone vary based on term lengths and delivery points. Uncommitted service is offered to “walk up” shippers. Keystone offers the uncommitted shippers an option to utilize the international joint rate to ship crude oil from Canada to the U.S., ending in Texas. A Canadian uncommitted toll is also available for uncommitted service to Haskett, near the boundary between Manitoba and North Dakota, for ultimate delivery to the United States.

Official Board documents related to the traffic, tolls and tariffs for the Keystone pipeline can be found here: Keystone pipeline toll documents [Folder 565787].

Abandonment funding

Updated December 2017

The Board requires all pipelines to set aside funds to safely cease operation of a pipeline at the end of its useful life. In 2014, TransCanada Keystone estimated it would cost $236 million to do this. These funds will be collected over 25 years and are being set aside in a trust. Official Board documents related to abandonment funding can be found here, sorted by year and by company: abandonment funding documents [Folder 3300366].

Financial resource requirements

Updated December 2017

The National Energy Board Act requires major oil pipeline companies to set aside $1 billion to pay for the costs of any incident that occurs, such as a spill. See sections 48.11 to 48.17 of the Act for more information. TransCanada Keystone Pipeline GP Ltd. demonstrated that is has financial resources in excess of $1 billion dollars. Official Board documents related to the Keystone’s financial resources can be found here: Keystone financial resources documents [Folder 2939093].

Pipeline financial information

Updated December 2017

Pipeline companies report important financial information to the Board quarterly or annually. A solid financial position enable companies to maintain their pipeline systems, attract capital to build new infrastructure, and meet the market’s evolving needs. The data in this table comes from Keystone’s quarterly surveillance reports [Folder 673804] filed with the Board.

Keystone Pipeline financial data
  2010 2011 2012 2013 2014 2015 2016
Revenues (millions) $47.5 $310 $370 $399 $432 $466 $445
Net plant (millions) $1805.5 $2106 $2097 $2060 $2035 $2090 $2052
Return on net plant 2.12% 7.78% 9.78% 10.39% 10.94% 11.61% 10.87%

Corporate financial information

Updated December 2017

TransCanada PipeLines Ltd. has operations in Canada, the United States and Mexico and operates three core businesses: natural gas pipelines, oil and liquids pipelines, and power. In 2016, Keystone’s earnings, including the United States portion of the pipeline, accounted for approximately 20% of TransCanada PipeLines Ltd.’s earnings. Financial ratios continue to be stable and credit ratings are investment grade.

Credit ratings and financial ratios provide an idea of the financial strength of a company, including its ability to attract capital to build new infrastructure and meet financial obligations. The credit ratings below are expert opinions of how likely the debt issuer is to live up to its obligations. The financial ratios provided below were calculated by DBRS.

TransCanada PipeLines Ltd. financial ratios and credit ratings
  2012 2013 2014 2015 2016 2017
Interest and Fixed-Charges Coverage Ratio 2.18 2.40 2.68 2.55 2.37 n/a
Cash Flow-to-Total Debt and Equivalents Ratio 15.1% 15.5% 15.9% 13.8% 11.0% n/a
DBRS Credit Rating A A (low) A (low) A (low) A (low) A (low)
Moody’s Credit Rating A3 A3 A3 A3 A3 A3
S&P Credit Rating A- A- A- A- A- A-
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