TransCanada shareholders shake off Keystone XL concerns, look to push forward

Some analysts say the Keystone XL pipeline could make up about 10 per cent of the company’s market value. TransCanada photo.

Keystone XL approved by Nebraska on Monday

One day after the Nebraska Public Service Commission okayed an alternative route for the Keystone XL pipeline, some TransCanada investors are encouraging the company to follow through with the $8 billion project.

The commission denied TransCanada’s preferred route, forcing the Calgary-based company to build the pipeline to the east of its preferred route.  The decision opens the door to possible delays as TransCanada must meet with affected landowners and opponents protest the project.

TransCanada says it will make its final investment decision by December.  Commercial support is a major factor in the decision.

So far, TransCanada has spent $3 billion on the 1,179 mile pipeline.

Echoing the views of a number of TransCanada shareholders, Manash Goswami, senior vice president and portfolio manager at First Asset ETFs told Reuters that “There might be a lot of court cases and what-have-you to go, but on the whole I’d like to see them go ahead with this project.”

Some analysts believe the Keystone XL project has the potential to contribute up to 10 per cent to the company’s C$55.5 billion market value.

According to a Reuters report, fund managers say the longer Keystone XL route should be manageable and many are positive about the company’s ability to finance the pipeline.

Ryan Bushell, vice president and portfolio manager at Leon Frazer and Associates and a TransCanada shareholder says in this current environment, the longer pipeline distance as small factor.

“An approval is an approval,” he told Reuters. “Time is more valuable than distance (because of) the rival pipelines and just the fact that the government could change, and this could all get shut down again.”