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Kerry says hopeful for Keystone pipeline decision soon

WASHINGTON (Reuters) - John Kerry, the new U.S. secretary of state, said on Friday he hopes his department will be able to make a decision on the Keystone XL oil pipeline in the near term.

Approval of the TransCanada Corp pipeline, which would link Canada's oil sands fields to refineries and ports in Texas, has been pending for four and a half years.

Environmentalists oppose the pipeline because the oil sands extraction process is carbon intensive. Backers of the project, which would transport 830,000 barrels of oil per day, say it would provide thousands of jobs in the United States and increase North American energy security.

"We hope that we will be able to be in a position to make an announcement in the near term," Kerry told reporters after a meeting with Canadian Foreign Affairs Minister John Baird.

Kerry said he pays "great respect" to the U.S.-Canada energy relationship and the importance of overall relations between the two neighbors. Canada is the top supplier of crude to the United States, the world's largest oil consumer.

The State Department is in charge of making a final decision on Keystone because the project would cross the national border. Kerry, who was a steadfast proponent of taking action on climate during his tenure as a senator, said his department has a review process underway on Keystone and he would honor it.

Baird said the two countries are on the same page on carbon emissions. "Obviously when it comes to the environment I think we have like-minded objectives," Baird told reporters. Canada and the United States have worked together on reducing vehicle and overall greenhouse gas emissions, and the two will do more work in those areas, he said.

TransCanada CEO Russ Girling met with State Department officials on Thursday in Washington in an attempt to push the project forward.

The State Department is expected soon to release an environmental impact statement on the project, a step it must complete before deciding whether the pipeline is in the national interest.

The department has said this year it hopes to get the final decision done before the end of March. A U.S. federal government source and two analysts, however, have said procedures still to come, including a likely 45-day public comment period on the environmental review, mean a final decision will not come before mid-June.

The southern leg of the project, from Texas to Oklahoma, is being built. President Barack Obama threw his support behind the segment after delaying a decision on the northern leg.

The delay, which came during the election year, was blamed on environmental concerns about the project in Nebraska. TransCanada has rerouted the line to avoid most of an aquifer in the state.

(Reporting by Timothy Gardner; Editing by David Brunnstrom and Paul Simao)

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