Shares of Canadian pipeline operator Enbridge Inc. dropped more than 4% on April 24 after a Minnesota judge agreed the Line 3 oil pipeline replacement project was needed, but rejected the company's preferred route.
Enbridge has proposed a C$8.2 billion (US$6.4 billion) replacement of its existing Line 3 export pipeline, which extends from Alberta into Wisconsin, doubling capacity on the line to 760,000 barrels per day.
But the project has run into opposition in Minnesota from the state, along with Native American tribes and environmental activists who have questioned whether the replacement is needed.
Administrative Law Judge Ann O'Reilly, of the Minnesota Office of Administrative Hearings for the Public Utilities Commission ruled late on Monday that Enbridge should be issued permission for the replacement, but said the company should use its existing right of way, adding hurdles to the project's construction.
Under the judge's recommended route, the existing pipeline would need to be removed and the new one put in its place. Enbridge had asked to leave its current Line 3 in the ground and lay new pipe, at times following a new corridor in the state.
The company said in a statement that it was pleased the judge had supported the project and said it would review her recommendations on routing.
The latest obstacle to Line 3 comes as work has been halted on Kinder Morgan Canada's Trans Mountain expansion pending a May 31 decision on whether the project, which faces opposition in the Canadian province of British Columbia, will go ahead.
Canada's oil producers, meanwhile, are desperate for new export pipelines, as rising production and tight capacity on existing pipelines and via rail has led to Canadian crude trading at a wide discount to the West Texas Intermediate benchmark.
Shares of Enbridge were down 4.72% at C$37.94 on the morning of April 24.
Recommended Reading
Defeating the ‘Four Horsemen’ of Flow Assurance
2024-04-18 - Service companies combine processes and techniques to mitigate the impact of paraffin, asphaltenes, hydrates and scale on production—and keep the cash flowing.
Tech Trends: AI Increasing Data Center Demand for Energy
2024-04-16 - In this month’s Tech Trends, new technologies equipped with artificial intelligence take the forefront, as they assist with safety and seismic fault detection. Also, independent contractor Stena Drilling begins upgrades for their Evolution drillship.
AVEVA: Immersive Tech, Augmented Reality and What’s New in the Cloud
2024-04-15 - Rob McGreevy, AVEVA’s chief product officer, talks about technology advancements that give employees on the job training without any of the risks.
Lift-off: How AI is Boosting Field and Employee Productivity
2024-04-12 - From data extraction to well optimization, the oil and gas industry embraces AI.
AI Poised to Break Out of its Oilfield Niche
2024-04-11 - At the AI in Oil & Gas Conference in Houston, experts talked up the benefits artificial intelligence can provide to the downstream, midstream and upstream sectors, while assuring the audience humans will still run the show.