Canadian regulators approve Enbridge's Line 9 plan

Thu Mar 6, 2014 8:03pm EST
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By Julie Gordon

VANCOUVER (Reuters) - Canadian regulators on Thursday approved Enbridge Inc's Line 9 oil pipeline reversal and expansion, conditional on the country's largest pipeline company undertaking additional work on consultation and safety.

Enbridge plans to reverse its Line 9B pipeline, which extends from southern Ontario to Quebec, and boost capacity of the entire Line 9 line by 25 percent to 300,000 barrels per day (bpd), in order to ship western oil to refineries in Eastern Canada. The oil would enter Ontario through Michigan on its Mainline system.

The approval by the National Energy Board (NEB) was widely expected, as the plan uses existing infrastructure, requires no new pipeline and much of the work will take place on Enbridge property or right-of-ways.

"Repurposing pipeline is always what people want to do first, versus building new pipeline," said Steven Paget, an analyst with FirstEnergy Capital. "I think there's demonstrated need and it really doesn't change what's already existing."

The project is one of several major pipeline investments proposed for North America, fueled by the rapid growth of Canada's oil industry. Efforts to boost pipeline capacity have been met with fierce opposition from environmentalists who argue that the tar sands are contributing to climate change.

"The board's decision enables Enbridge to react to market forces and provide benefits to Canadians, while at the same time implementing the project in a safe and environmentally sensitive manner," the NEB said in its report.

The approval of the 639-km (400-mile) pipeline reversal and expansion is contingent on the company meeting 30 conditions related to emergency response, continued consultation and pipeline integrity.

The agency also turned down Enbridge's request for exemption from "leave to open" requirements, meaning the company must ask for permission to start up the line after all work is finished.   Continued...

The "Line 9" Enbridge oil pipeline is worked on in East Don Parkland in Toronto, March 6, 2014. REUTERS/Mark Blinch