Washington, Jan 19 (IANS): US has cancelled a $7-billion oil pipeline project with Canada, Xinhua reported.

President Barack Obama, in a statement released by the White House, said the "rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment."

"As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department's report, I agree," he said.

The $7 billion Keystone XL pipeline, proposed by TransCanada, an energy giant based in Canada, would run 2,720 km to connect Canada's oil sands to refineries around Houston and the Gulf of Mexico.

Due to intense opposition from environmentalists as well as public officials in the US, the Obama administration tried to delay potential approval of the Keystone XL pipeline until 2013.

Obama, however, emphasised that the rejection was "not a judgment on the merits of the pipeline," blaming the "arbitrary nature of a deadline" for preventing the State Department from gathering information necessary to make a decision.

"I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil," he said.