YANKTON - TransCanada Corp. has started the paperwork phase for its proposed Keystone XL pipeline that would carry crude oil across western South Dakota.

Spokesman Jeff Rauh said the Calgary-based company has applied for a presidential permit that is required because the pipeline would start in Canada and cross the international border. It would go through Montana, South Dakota and central Nebraska on a route to Gulf Coast refineries.

Rauh said regulatory review on both the federal and state level will follow. He said construction is slated to begin in South Dakota in 2011, with the pipeline in service in 2012.

TransCanada is already installing its Keystone pipeline to carry crude oil from Canada through the eastern Dakotas. Its capacity would be 590,000 barrels daily, slightly more than Keystone XL.

The second Keystone pipeline would cut diagonally across South Dakota, entering in the far northwestern corner and leaving in the south central part of state, south of Gregory. It would traverse Harding, Butte, Perkins, Meade, Haakon, Jones, Lyman and Tripp counties.

The pipeline would meet up with Keystone I at the northern border of Kansas and then split off in Oklahoma for refineries at Houston and Port Arthur, Texas.