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Husky Energy Set To Restart Pipeline

Husky Energy (TSE: HSE) received a greenlight to restart its pipeline after successfully undergoing testing, inspection, and evaluation of a previously ruptured pipeline, according to local media.

Last July, Husky’s pipeline leaked about 225,000 liters of heavy oil mixed with a diluent, about 40 percent of which made its way into the North Saskatchewan River. That was 15 months ago, and the pipeline has been idle ever since.

The Saskatchewan government gave the go-ahead to restart the pipeline on Wednesday, but the approval doesn’t mean that Husky will not be fined handsomely for the 2016 spill.

“Husky’s integrity management program has been updated to include all geotechnical hazards and all management programs have been updated and implemented,” an emailed statement from Kathy Young, government spokesperson, to the press read, commenting on the reasons for the approval.

Husky claims that the leak was due to pipeline buckling as a result of the ground shifting. The Calgary-based company says that steps have been taken to prevent future leaks. Husky completed the cleanup last October, and was reportedly able to recover about 210,000 of the 225,000 liters that spilled. The cleanup efforts cost Husky more than $90 million.

As part of the approval to restart, Husky will be required to submit pipeline data weekly, and inspect the pipeline every six months.

Related: Traders Are Betting On $100 Oil In 2018

The approval to restart will likely not set well with environmentalists, who are holding out hopes for stiff penalties. While government officials have said that Husky’s role in the pipeline spill did not rise to the criminal level, it could still face fines up to $1 million per day.

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Husky’s actions were called into question over the spill, after it failed to shut down the system the same day the leak occurred. So far, the government has invoiced Husky for $1.1 million for expenses associated with the cleanup.

By Julianne Geiger for Oilprice.com

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