(Reuters) - TransCanada Corp (TRP.TO) on Friday beat profit estimates and said it does not expect major changes in throughput on its Keystone pipeline once pressure restrictions related to a leak in South Dakota are removed.
Net income rose to C$734 million, or 83 Canadian cents per share, in the first quarter from C$643 million, or 74 Canadian cents per share, for the same period in 2017. (bit.ly/2r4qjZn)
Excluding items, TransCanada earned 98 Canadian cents per share, beating analysts’ average estimate by 14 cents, according to Thomson Reuters I/B/E/S.
Pressure has been restricted on the 590,000 barrel per day Keystone pipeline since late last year, after the line leaked some 9,700 barrels of oil in South Dakota.
The restrictions “really did have a minor impact on our throughput and so consequently, I don’t anticipate seeing a tremendous increase in our throughput once it’s lifted, based on some of the changes we’ve made already,” said TransCanada’s head of liquids Paul Miller on a conference call.
Miller also said the company was continuing to work towards starting construction on the Keystone XL expansion in 2019 and that $8 billion remains “a good number” for capital costs.
The long-delayed Keystone XL project has pitted environmentalists, who worry about spills, against industry, who say the project will shore up discounted Canadian oil prices and attract investment to Canada’s energy sector.
The company also said the LNG Canada liquefied natural gas export project was looking positive following news the company had selected a contractor to lead construction.
TransCanada, which is building the pipeline that would connects the export terminal to Canadian gas fields, said the bulk of its capital spending will be in 2021 and 2022, assuming the project goes ahead.
The company expects to invest C$21 billion in the near term, down from the C$23 billion it had earmarked earlier.
TransCanada said earnings from its oil pipelines, of which Keystone is the biggest contributor, rose 50 percent to C$341 million ($264.90 million) in the first quarter .
TransCanada said earnings from its Canadian natural gas pipelines fell 10.2 percent to C$253 million in the reported quarter.
Revenue rose marginally to C$3.42 billion from C$3.41 billion.
Reporting by Yashaswini Swamynathan and Anirban Paul in Bengaluru and Julie Gordon in Toronto; Editing by Saumyadeb Chakrabarty and Cynthia Osterman