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TransCanada files suit against US over pipeline

June 26, 2016

TransCanada has formally filed a $15 billion suit over US President Barack Obama's rejection of the Keystone XL pipeline. The suit comes just before the North American leaders' Summit next week in Ottawa.

A TransCanada Keystone Pipeline pump station
Image: Reuters/L. Hickenbottom

After seeking negotiations toward "an amicable settlement of the dispute" over the controversial oil Keystone XL pipeline project, TransCanada formally filed a suit against the US government, seeking damages of $15 billion (13.5 billion euros).

The company first announced its intention to sue in January, but formally filed suit late on Friday after no settlement could be reached, as shown by legal documents posted on their website.

TransCanada asserted that the US' denial of a permit to complete the Keystone XL pipeline to link Canada with the Gulf of Mexico was "unjustified" under the North American Free Trade Agreement (NAFTA). The company also said the decision to block the project exceeded US President Barack Obama's constitutional powers.

The damages are to cover losses the TransCanada said it suffered due to the pipeline's rejection.

Obama rejected the cross-border crude oil pipeline last November seven years after the company first proposed the project. He said it would not provide a meaningful long-term contribution to the US economy.

The TransCanada filings argued that the US government's decision "was symbolic, and based merely on the desire to make the US appear strong on climate change."

Environmentalists have staunchly opposed the Keystone XL pipeline, which would have carried crude oil from the Alberta tar sands deposits through the US and to Mexico.

The US' decision to block the pipeline strained US-Canada relations and angered many in both countries' oil industries.

TransCanada is suing the US in federal court in a separate legal action to try and reverse the pipeline's rejection.

The heads of NAFTA members, Mexico, the US and Canada are set to meet in Ottawa for a North American leaders' summit on June 29. The meeting was canceled last year due to tensions between the then Canadian Prime Minister Stephen Harper and Obama over the pipeline.

rs/bk (AFP, Reuters)