NEW YORK (TheStreet) -- The fate of TransCanada's (TRP) controversial Keystone XL pipeline is still in limbo as the U.S. Senate rejected by just one vote a bill seeking approval to begin construction. But the defeat in the Senate isn't the end of the world for Canada's second-biggest pipeline maker.
The Calgary-based company has been waiting for six years for approval from U.S. policy makers on the project, which aims to ship up to 830,000 barrels of heavy oils a day produced from Canadian tar sands to the refineries at the U.S. Gulf Coast. Had the Senate approved the pipeline, President Obama, who was not in favor of the approval until the State Department completed its review, could still have vetoed the legislation.
Amid the U.S. delays, the estimated cost of Keystone XL has climbed to $8 billion, 48% higher than its previous estimate, TransCanada said during the third-quarter conference call earlier this month.
Must Read: Keystone Pipeline Construction Rejected by Senate, Deals Blow to Republicans
Meanwhile, futures for West Texas Intermediate crude and Brent crude have fallen to $74 and $78 a barrel, respectively, after remaining above $90 through a large part of the last two years. FirstEnergy Capital analyst Steven Paget, however, said in an email to TheStreet that Keystone XL remains an economically viable project even in a $70-$80 a barrel oil price environment.
Keystone XL, however, is neither the biggest nor the most attractive project in TransCanada's portfolio. On the contrary, the pipeline is a small part of TransCanada's massive backlog of several commercially secured projects valued at $46 billion which the company expects to put into service through the end of the decade.