TransCanada Corp. expects to see strong interest in its proposal to ship light oil from Montana to markets further south, an executive with the pipeline giant told investors and analysts Wednesday.

A so-called "open season" — in which potential customers are invited to bid to ship their oil on a proposed U.S. pipeline project called Bakken Marketlink — wraps up Friday.

"We haven't got the final bids, but we've so far seen a significant amount of interest," said Alex Pourbaix, who is in charge of TransCanada's oil pipeline business.

"We do anticipate a successful open season for this project."

Bakken Marketlink would ship 100,000 barrels of crude a day from Baker, Mont. — in the heart of the Bakken oil zone —to a massive storage hub in Cushing, Okla., and to refineries along the U.S. Gulf Coast.

The Bakken play is a huge light oil pool that stretches through parts of Saskatchewan, North Dakota and Montana.

There is not enough pipeline capacity in the Bakken to get crude to market, so producers in the play have been forced to sell their product at a discount, Pourbaix said.

TransCanada expects to announce the results of its Bakken open season early next year. It is expected to be in-service in 2013.

An open season is also underway for a project called Cushing Marketlink, which would funnel crude from the oversupplied storage hub to Gulf Coast refineries.

TransCanada rival Enbridge Inc. (TSX:ENB) has talked about a similar project called Monarch, which could ship 350,000 barrels of light oil from Cushing to the Gulf.

TransCanada's Cushing Marketlink would come into service in 2013 — around the same time its Keystone XL pipeline extension to the Gulf is expected to be ready.

Earlier this year, the first phase of the Keystone pipeline, stretching from Alberta to the U.S. Midwest, began filling with crude. Keystone XL would expand capacity by 500,000 barrels per day and extend the line to Port Arthur, Texas.

The Bakken Marketlink and Cushing Marketlink projects are "really good examples of incremental attractive investment opportunities that we're able to generate out of this Keystone footprint," Pourbaix said.

Some U.S. legislators are concerned Keystone XL would increase U.S. reliance on so-called "dirty oil" from Canada's oilsands, which environmentalists say emit more carbon dioxide than other sources of crude. There are also worries a leak on Keystone XL could contaminate the Ogallala aquifer, a crucial drinking water supply.

TransCanada expects to receive U.S. State Department approval for Keystone XL early next year, Pourbaix said.

"We're very confident that we're going to receive these approvals on the basis that Keystone is both an important and — we would argue — a necessary infrastructure investment to ensure U.S. energy security," he said.

Pourbaix called Keystone XL a "true shovel-ready project" that will give the U.S. economy a good shot-in-the-arm.

"We remain very confident that Keystone is going to proceed as those benefits become better understood by stakeholders in the U.S."

The oil pipeline expansions are just part of TransCanada's current $21-billion capital program.

TransCanada is best known as North America's largest natural gas shipper with a vast network of pipelines criss-crossing North America. It also has a growing power generation business.

TransCanada shares rose a nickel to $36.05 on the Toronto Stock Exchange around midday Wednesday.

Source: Winnipeg Free Press

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