DBRS Comments on Nebraska PSC Decision on TransCanada’s Keystone XL

DBRS Limited (DBRS) notes that the Nebraska Public Service Commission (PSC) has approved an alternative route for the proposed Keystone XL Pipeline project (the Project), clearing the last regulatory hurdle for the Project. TransCanada Corporation (TransCanada or the Company) has stated that it will evaluate the impact of the PSC decision on the cost and schedule of the Project, as the PSC did not approve TransCanada’s preferred route but a slightly longer alternative route for the 830,000 barrels-per-day pipeline through the State of Nebraska.

DBRS notes that the alternative route as approved by the PSC could entail additional execution challenges, as new landowner consents and local permits could be needed that could add more time and costs to the Project. Concurrently, the Company is analyzing the results of the open season that closed on October 26, 2017, to solicit shipper commitments for the Project. The results of the open season will factor into the Company’s assessment of the economic viability of the Project in light of today’s approval for a final investment decision to be made. DBRS will review details on the timing, costs and shipper commitments as they become available in order to assess the impact of the decision on the Company’s credit profile.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodologies are Rating Companies in the Pipeline and Diversified Energy Industry, DBRS Criteria: Commercial Paper Liquidity Support for Non-Bank Issuers and DBRS Criteria: Preferred Share and Hybrid Criteria for Corporate Issuers, which can be found on dbrs.com under Methodologies.

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