Enbridge Line 3 completion delayed a year
Minnesota permits won't be issued until November, pushing the in-service date from late 2019 to the second half of 2020
March 2, 2019 5:36 pm
After a ruling in Minnesota, Enbridge now expects the replacement and expansion of its Line 3 crude oil pipeline replacement to be in service about a year later than expected.
The project, previously slated to start shipping crude in the fourth quarter of 2019, is now expected to enter service in the second half of 2020, Enbridge said Friday.
Construction is being pushed back because the Minnesota permitting process won’t be complete until November, and the American federal permits won’t be received until as long as 60 days after that.
Canadian crude prices have trailed U.S. oil amid shipping constraints.
The delay is a setback for Canadian oil producers, who have suffered from a lack of pipeline capacity that has made it difficult to ship their crude to refineries, leading to discounted prices for Western Canadian crude.
Enbridge’s Line 3 replacement, construction of which through the Moosomin area is just wrapping up, is particularly important to the Western Canadian energy sector because the government of Alberta was counting on its startup this year to let it end mandated production cuts that were implemented to cope with a glut of crude.
The postponement of the C$9 billion ($6.8 billion) Line 3 expansion, which would add 370,000 barrels of daily shipping capacity, is the latest in a string of canceled or stalled projects that have plagued the Canadian energy industry.
TransCanada Corp.’s Keystone XL has been on the drawing board for more than a decade amid environmental and landowner opposition.
The Trans Mountain expansion, which the federal government bought from Kinder Morgan Inc. to save it from cancellation, has been stalled amid legal challenges.
The industry also has been hit in recent years by the cancellation of TransCanada’s Energy East pipeline and the Canadian government’s rejection of Enbridge’s proposed Northern Gateway conduit.
The replacement and expansion of Line 3 would help ship more crude along a 1,031-mile (1,659-kilometer) route from the Alberta oil hub of Hardisty to Superior, Wisconsin.
Construction is already finished in Wisconsin and largely completed elsewhere along the route. Enbridge said as recently as Feb. 15 that it expected to bring the project into service this year.
Moosomin recently hosted a Pro-Pipeline rally, and the town and RM have been leading efforts to restart discussion on Energy East. Go to www.moosomin.com/energy-east for more on the local efforts on Energy East.