TransCanada's stock tumbled five percent Friday after the United States rejected the company's proposal to build the Keystone XL pipeline connecting Canada's oil sands to US Gulf Coast refineries.

Morning trading slashed almost two dollars off the share price, which hit US$32.47 in New York at 1730 GMT, moments after US President Barack Obama said the project "would not serve the national interests of the United States."

TransCanada said it may file a new application. "TransCanada and its shippers remain absolutely committed to building this important energy infrastructure project," company chief executive Russ Girling said in a statement.

"We will review our options to potentially file a new application for border-crossing authority to ship our customer's crude oil, and will now analyze the stated rationale for the denial."