UPDATE 3-Keystone pipeline approval in limbo after Nebraska ruling

Wed Feb 19, 2014 8:08pm EST
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By Patrick Rucker and Valerie Volcovici

WASHINGTON Feb 19 (Reuters) - A Nebraska court on Wednesday voided the governor's decision to allow the Keystone XL pipeline to pass through the Midwestern state, creating another snag for the controversial project to link Canada's oil sands with refineries in Texas.

Nebraska Governor Dave Heineman last year supported legislation that cleared the way for TransCanada Corp's $5.4 billion pipeline to cross parts of his state.

But some landowners objected to the legislation, saying it disregarded their property rights.

On Wednesday, the District Court of Lancaster County sided with landowners, a move that makes inevitable additional months of delay to the project, already more than five years in the planning.

The Nebraska Public Service Commission, or PSC, is the proper state agency to decide pipeline matters, Judge Stephanie Stacy wrote in a lengthy ruling, declaring the governor's decision "unconstitutional and void."

State officials and a lawyer for landowners agreed a new permit application for the pipeline could require at least six months of work - and probably much longer.

Heineman filed a notice later on Wednesday appealing the decision to a state appeals court. An appeal could also take months.   Continued...