UPDATE 2-TransCanada’s $15 bln U.S. Keystone XL NAFTA suit suspended

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By Ethan Lou | CALGARY, Alberta

CALGARY, Alberta TransCanada Corp has
suspended a $15 billion NAFTA suit filed against the United
States over the Keystone XL pipeline, the company said on
Tuesday, after U.S. President Donald Trump approved the project
last month.

The monthlong suspension of the challenge under the North
American Free Trade Agreement (NAFTA) came after Trump signed an executive order smoothing the path for Keystone XL, inviting
the company to reapply for a permit after the administration of
former president Barack Obama had rejected the project.

If operational, Keystone XL would bring more than 800,000
barrels per day of heavy crude to the Gulf Coast from Canada,
which holds the world’s third-largest reserves but lacks the
infrastructure to move it easily.

The project has received regulatory approval and government
backing in Canada, but in the United States, environmentalists
had campaigned against it for more than seven years.

In an entry dated Monday, the website of the International
Centre for the Settlement of Investment Disputes showed
TransCanada’s legal challenge over the pipeline was suspended
until March 27, pursuant to mutual agreement.

TransCanada, based in Calgary, Alberta, confirmed the
challenge has been suspended but did not immediately offer
additional comment.

TransCanada Corp had sought $15 billion in damages,
according to legal papers, seeking to recover what it said were
costs and damages. It also sued the United States separately in
a Houston court over Keystone XL. A judge suspended that lawsuit
last month after Trump’s executive order.

Alberta Premier Rachel Notley, who has been pro-pipelines,
said in a media conference call the NAFTA suit’s suspension was
a “prudent” move that lets the company “retain their legal
rights” without spending large amounts on fees.

“It’s probably evidence … they’re taking a wait-and-see
approach,” she said.

NAFTA, whose arbitration provisions allow companies to
challenge governments before international panels, has been a
target of anti-free-trade sentiments in the United States. Trump
has said he wants to renegotiate the pact for more favorable
terms.

Trump also has said he wants to do the same for Keystone XL,
and analysts have said it was unclear how quickly the pipeline
could go ahead if approved.

TransCanada shares were up 1.34 percent at C$61.31 on the
Toronto Stock Exchange in early afternoon trading, while the
energy sector on the whole was down.



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