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Enbridge’s much-debated Line 3 oil pipeline replacement chalked up one in the win column on Wednesday, according to Reuters who cited company statements.
The Line 3 pipeline plan garnered approval yet again from the Minnesota Public Utilities Commission to replace in total over a thousand miles of pipeline.
The approval for Line 3’s replacement actually came last year, but petitions were later raised by those opposing the project, asking for the commission to reconsider its approval. It dispensed with the petitions in December, but Minnesota’s governor challenged that ruling last month, the latest in a long string of setbacks for the pipeline project.
Today, Minnesota confirmed its earlier decision, denying all requests for reconsideration.
The pipeline, which will help bring Canadian oil to US markets, is not only a win for Enbridge, but a win for Canada’s oil industry, which has suffered from a serious shortage of takeaway capacity that ate away at the price of its oil and created a huge discount to WTI.
Despite the win, the project is not expected to begin carrying oil until at least H2 2020. Enbridge had originally planned to have the pipeline completely replaced by the end of 2019, but announced earlier this month that it would delay the completion by six months after hearing from the state of Minnesota that the timeline for collecting permits would take longer than originally thought.
Line 3 is expected to have a capacity of 370,000 bpd—not enough to completely eliminate Canadian bottlenecks, but enough to relieve much of the pressure on Canada’s oil industry.
The Line 3 replacement is one of two major pipeline projects that Canada’s oil industry desperately needs. Earlier this week, reports emerged that the unknowns in Canada’s oil industry has cut into long-term crude oil contracts as traders took a wait-and-see attitude before diving in.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.