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Trump touted the approval as being a big job creator, and TransCanada CEO Russell Girling said the pipeline would create "thousands of jobs".

One of the sources said the State Department was working to get the approval completed before Monday, the end of the 60-day timeline under Trump's January executive order for the construction of Keystone and the Dakota Access pipelines.

The 1,700-mile pipeline, as envisioned, would carry oil from tar sands in Alberta, Canada, to refineries along the Texas Gulf Coast, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. They say it generates more carbon emissions to refine the heavy, thick crude than to process other oil types.

The American Petroleum Institute praised the approval. TransCanada has estimated it will create 20,000 direct jobs and 118,000 indirect jobs, although a State Department review estimated its impact on direct and indirect jobs at a total of 42,000.

The Keystone XL oil pipeline from Canada still faces a range of potential hurdles even with a sign-off from the USA government, analysts said.

"While receiving the permit is a good step forward for the project that could provide visible growth in the 2020 time frame, given the prior comments and executive orders out of the Trump administration, we believe that the receipt of the presidential permit was expected by the market", RBC Capital Markets said in a note to clients.

A press release from the Department of State said that the Under Secretary for Political Affairs, Thomas A. Shannon, Jr., considered "a range of factors" in making his decision, including cultural, environmental and economic factors. The pipeline owned by TransCanada received a presidential permit Friday, but Carr said he expects protests and noted it still needs a permit from the state of Nebraska.

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Skirmishes could play out at the national, state and local levels as TransCanada (TSX:TRP) works to put in place the final permits needed to start construction, with Nebraska the focal point of opposition.

TransCanada's US -listed shares TRP.N rose 0.52 percent to $46.50, having surged as much as 7 percent in premarket trading.

Former president Barack Obama in 2015 blocked the construction of the pipeline after years of review, citing environmental concerns.

Carr will, however, meet with U.S. Energy Secretary Rick Perry in Washington on Thursday. A White House spokeswoman said this month that Trump's directive applied only to new pipelines, and since TransCanada had already stockpiled pipe, "the steel is already literally sitting there".

Keystone pipeline would create about 3,900 construction jobs if it was built in one year, according to a State Department report.

Canada is the world's sixth-largest oil producer thanks to the Alberta oil sands.

"And I think there's still a contingent of special interest groups which are going to weigh in on the whole project, so it's certainly not a foregone conclusion that this thing will be built". In 17 of these 27 counties the property tax revenue would represent a 10 percent or more boost.