UPDATE 1-N.Dakota pipeline builders need fair access-US lawmaker

Fri Jul 20, 2012 4:57pm EDT

* FERC considering complaint that Enbridge blocking access

* Lawmaker Peterson says new pipeline capacity "critical"

By Russ Blinch

WASHINGTON, July 19 (Reuters) - A Democratic U.S. lawmaker called on federal regulatory authorities to ensure "discriminatory practices" were not blocking construction of new pipelines to transport oil from the booming oil play of North Dakota.

"Currently, only one pipeline runs eastward across North Dakota to Minnesota, and there is a critical need for additional pipeline capacity to support oil production in this region," Minnesota Representative Collin Peterson wrote in a letter to Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission.

"We need to ensure that new market participants have open access to the common carrier pipelines located across the country and are given the same treatment as more established companies."

Although Peterson did not mention any companies by name, High Prairie Pipeline LLC has filed a formal complaint with FERC saying Canada's Enbridge Inc was being discriminatory in refusing an interconnection with its existing line in Minnesota.

High Prairie is proposing a 450-mile pipeline from North Dakota to Clearbrook, Minnesota where it would connect with the Enbridge line, which would help deliver surging crude production from the Bakken oil shale play.

In the complaint filed with FERC, High Prairie, a unit of Saddle Butte Pipeline LLC, accuses Enbridge of discrimination by not allowing a connection even though Enbridge has capacity to carry High Prairie's proposed flow of 150,000 barrels per day of oil.

"Yet Enbridge Energy has thus far refused to grant High Prairie an interconnection, except on proposed terms that are unjust, unreasonable, and unduly discriminatory," High Prairie said in the complaint filed in May.

FERC is considering the complaint from High Prairie, according to a FERC spokesperson.

Enbridge said High Prairie's allegations were "unfounded" and that it had already spent $1 billion over the past seven years to accommodate rising production from North Dakota.

"Enbridge agrees that all market participants should operate on a level playing field, however, in this case it is High Prairie which is attempting to have the playing field changed in their favor simply because they chose to reject several reasonable alternatives...," company spokeswoman Lorraine Little said.

Canada's Enbridge recently came under fire from a U.S. transportation authority for its handling of the massive oil pipeline spill in Michigan in 2010.

The U.S. National Transportation Safety Board said there was a complete breakdown in the company's safety measures while its employees performed like "Keystone Kops," trying to contain it.

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