BISMARCK, N.D. (AP) — The U.S. State Department has issued a permit to a Canadian company for a $5.2 billion pipeline to transport crude oil from Canada through seven states.

The State Department said the permit issued Friday to TransCanada Corp. for its Keystone pipeline was in the national interest.

“It increases U.S. market access to crude oil supplies from a stable and reliable trading partner,” the agency said in a statement. “Canadian oil represents a safe, secure supply for the North American market.”

TransCanada spokeswoman Shela Shapiro called the permit a “significant milestone” that the company was waiting for to start work on the pipeline. Construction will begin in late spring or early summer in North Dakota, she said.

Only the North Dakota portion of the pipeline is slated for construction this year, Shapiro said.

The entire 2,148-mile pipeline will be able to carry 590,000 barrels of oil daily by late 2010, the company said. Its route is across Saskatchewan and Manitoba, and through North Dakota, South Dakota, Nebraska, Kansas and Missouri to refineries in Patoka, Ill., and Cushing, Okla.

The company is expecting crude to be piped to the refinery in Illinois late next year and to the refinery in Oklahoma a year later.

The Keystone pipeline, which will be equally owned by TransCanada, of Calgary, Alberta, and Houston based-ConocoPhillips, would be nearly 500 miles longer than the trans-Alaska pipeline.

In 2006, Canada supplied the U.S. with 2.3 million barrels of oil daily, or about 17 percent of total U.S. imports, the State Department said. The Keystone pipeline would increase that by up to 4.5 percent, the agency said.

The State Department said earlier this month that it intended to issue the permit if no other federal agency objected. The agency has said the review of the project was the largest in its history.

TransCanada still needs permits from some states and county governments along the pipeline route, Shapiro said. Most of the easements along the route have been achieved, she said.

Pipeline opponents worry about leaks and the impact on water supplies.

The State Department, in its environmental impact statement, said the pipeline, as proposed, “would result in limited adverse environmental impacts during both construction and operation and would be an environmentally acceptable action.”

Regulators in Canada already have approved the route in that country.

In North Dakota, the 30-inch underground pipeline would run for 218 miles through Cavalier, Pembina, Walsh, Nelson, Steele, Barnes, Ransom and Sargent counties. The size of the pipeline will increase to 36 inches at the Nebraska-Kansas border.

In South Dakota, it will pass through Marshall, Day, Clark, Beadle, Kingsbury, Miner, Hanson, McCook, Hutchinson and Yankton counties.