Houston, 24 August (Argus) — TransCanada has begun construction in Texas on its 700,000 b/d Oklahoma-to-Texas pipeline – dubbed the Gulf Coast Project – that is expected to alleviate a buildup of crude stocks in the midcontinent.

An east Texas judge this week said he intends to rule in TransCanada's favor in a case where a Texas farmer challenged the company's common carrier status, which gives it the right of eminent domain. The pipeline, which is expandable to 830,000 b/d and was formerly the southern leg of Keystone XL, will originate in the crude storage, delivery and pricing hub of Cushing, Oklahoma, and deliver into Nederland, Texas, with a lateral to Houston.

Construction on the pipeline started 9 August at several locations in Texas, TransCanada said. Legal challenges to its common carrier status have not delayed construction on the line, which is expected to be operating by the end of 2013.

“We are able to proceed with construction because we have met all the regulatory requirements as a common carrier. We have filed for legal authority to enter property where landowners continue to object to our presence,” the company said in a statement.

The company said it has acquired about 99.6pc of easements needed to build the line and said it is continuing discussions with the remaining landowners.

The company has drawn heat from environmental and land rights groups in its push to build the Keystone XL pipeline and Gulf Coast project, which would move crude from Canada through the midcontinent and on to the refining hubs of the Texas Gulf coast. The company split the project into two segments, naming the southern leg the Gulf Coast Project. Keystone XL is still awaiting a presidential permit.

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