Enbridge Inc.'s plan to build a massive new pipeline to carry oil out of North Dakota's surging Bakken field faces possible delays after regulators in Minnesota said they would review alternate routes for the pipeline.
A hearing is scheduled for Monday to set a new schedule for reviewing the $2.6-billion (U.S.) pipeline after the state's Public Utilities Commission ruled it would consider six alternative routes for the project. Sandpiper would cut through Minnesota from Tioga, N.D., on its way to Enbridge facilities in Wisconsin, where oil would be transferred to other pipes for delivery to Canadian and U.S. refineries.
The pipeline is among the $36-billion in projects deemed commercially secure by Enbridge, as the Calgary-based company seeks to re-tool North America's pipeline network to capitalize on fast-growing oil production from U.S. shale deposits and Canada's oil sands.
The commission's decision could set back Enbridge's timeline for laying pipeline into the heart of North Dakota's oil boom, which yielded a record-high 1.1 million barrels per day in July, according to data published Friday by the state's Department of Mineral Resources.
Sandpiper has received the blessing of state legislators in North Dakota, but Enbridge's U.S. affiliate needs clearance from Minnesota before starting construction. While the company had targeted a start-up of 2016 for the project, the utilities commission now plans to first rule on whether the project is needed prior to assessing possible routes, said Dan Wolf, the agency's assistant executive secretary. By law, the commission has until March 19, 2015 to render a decision.
"The applicant's first route would be part of that discussion. It doesn't mean that's where we end up but it's part of the review process," he said.
A spokesman for Enbridge in Calgary said the company would have a better understanding of what the commission's ruling means following Monday's hearing.
"Meanwhile, Enbridge continues to work with stakeholders along the proposed route," Graham White said in an e-mail. "Those most directly affected by the project – landowners whose private property will be crossed – support the project." More than 85 per cent of them have signed easement agreements with Enbridge, he added.
"We will continue to work with the regulatory and permitting authorities, as well as the public, as the regulatory process unfolds."
Enbridge last year said Marathon Petroleum Corp. had agreed to be an "anchor" shipper for the pipeline. The project will add 225,000 bpd of capacity to Enbridge's North Dakota system.