If Keystone XL Approved, Quanta, Michels and Sheehan To Build 1179-Mile Link

November 2011, Vol. 238 No. 11

TransCanada has selected Michels Corporation, Price Gregory Services (an operating unit of Quanta Services) and Sheehan Pipeline Construction Company to form a joint venture construction company that will build 1,179 miles of pipeline and related infrastructure from Hardisty, Alberta, to Steele City, Neb., if the proposed TransCanada Keystone XL Pipeline project receives final approval.

MPS Constructors, LLC (MPS), consists of three pipeline construction companies: Michels Corporation, Price Gregory Services, Incorporated and Sheehan Pipeline Construction Company. The project remains subject to TransCanada obtaining all required approvals and completing the contract with MPS.

The scope of services to be provided by each joint venture member is still being defined and the finalization of the terms of the joint venture and associated contracts are in process. Quanta anticipates, however, that it will play a significant role in the construction of the pipeline infrastructure for the Keystone XL Pipeline project once all approvals and agreements are finalized.

“The Keystone XL Pipeline is the largest individual infrastructure project on the horizon in the industries we serve. This project is expected to directly create thousands of construction and manufacturing jobs in the United States, including at least 2,000 construction jobs for Quanta alone,” said Jim O’Neil, president and chief executive officer of Quanta Services. “Quanta brings more than 100 years of pipeline construction experience and what we believe is the highest quality and most experienced workforce in the industry to this project. We are committed to building this pipeline safely and in compliance with the high level of environmental requirements established by TransCanada. We are proud to have been selected by TransCanada, a long-time customer, to participate in a project that is expected to positively impact the country in so many ways.”

The proposed Keystone XL Pipeline project totals approximately 1,661-miles of 36-inch crude oil pipeline that would begin at Hardisty, Alberta, and extend southeast through Saskatchewan, Mont., South Dakota and Nebraska. The pipeline would then incorporate the existing Keystone Pipeline Phase II through Nebraska and Kansas to serve markets at Cushing, Okla., before continuing through Oklahoma to a delivery point near existing terminals in Nederland, TX, to serve the Port Arthur, TX, marketplace. As described above, MPS will build 1,179 miles of pipeline and related infrastructure from Hardisty, Alberta, to Steele City, NE. TransCanada has indicated that if construction of the pipeline begins early in 2012, the Keystone XL Pipeline is expected to be operational in the second half of 2013.

“Within days of receiving regulatory approval, the Keystone XL project would create approximately 20,000 U.S. jobs. The construction jobs created for Quanta as a result of their involvement in the project is a tangible example of the employment benefits this project will provide,” said Alex Pourbaix, TransCanada’s President, Energy & Oil Pipelines.

“This $7 billion, privately funded project is expected to create 118,000 spin-off jobs in local areas while the pipeline is being built, as well as $20 billion of economic benefit to the United States during construction and should contribute more than $5 billion in property taxes to the communities it will pass through over the lifetime of the pipeline. We believe going through the most extensive review process that any crude oil pipeline has ever undergone, will result in the safest pipeline ever built in North America.”