Texas judge orders temporary halt on TransCanada pipeline work

HOUSTON Tue Dec 11, 2012 1:11pm EST

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HOUSTON Dec 11 (Reuters) - A Texas judge has ordered TransCanada Corp to temporarily halt work on a pipeline planned to carry heavy crude oil from Oklahoma to Texas refineries on the property of a local landowner who has sued the pipeline operator for fraud.

Texas County Court at Law Judge Jack Sinz in Nacogdoches County on Friday signed a temporary restraining order to stop TransCanada from building a pipeline across the property of Michael Bishop in east Texas about 150 miles (241 km) northeast of Houston. Sinz said there was "sufficient cause" to halt work until a planned Dec. 19 hearing.

According to Bishop, a 64-year-old ex-Marine and medical student, the material to be carried on the pipeline is not crude oil but diluted bitumen that does not meet the conditions of TransCanada's permits.

The judge's action is the latest of several landowner disputes that could prove troublesome for TransCanada. In February, another Texas judge temporarily halted pipeline work in northeast Texas due to archaeological concerns.

Bishop, who is representing himself in the case, is also challenging whether TransCanada, Canada's largest pipeline company, can use eminent domain to condemn private land for pipeline construction.

"I will continue every effort to repel this foreign invasion and hopefully restore all of the property stolen by TransCanada via fraudulent means, to the rightful owners," Bishop said in a statement.

TransCanada said it has begun construction on Bishop's property, and that he signed an easement allowing TransCanada access to the property three weeks ago.

"Mr. Bishop's request does not impact overall construction, and we are on track to bring this pipeline into operation in late 2013," the company said in a statement.

The U.S. Army Corps of Engineers in July gave a permit to the $2.3 billion Gulf Coast Project, which will carry 700,000 barrels of crude per day from the Cushing, Oklahoma, storage hub to Houston.

The pipeline is the southern leg of the Alberta-to-Houston Keystone XL project, which TransCanada split in two after U.S. President Barack Obama refused to approve the project last year because of environmental concerns.

The company expects a U.S. decision on whether the remaining portion of the line can be built to come early next year.

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