Enbridge plans Alberta Clipper pipeline boost despite U.S delays

CALGARY, Alberta Thu Aug 21, 2014 6:44pm EDT

CALGARY, Alberta Aug 21 (Reuters) - Enbridge Inc, Canada's largest pipeline company, might be able to circumvent a delay in U.S. approvals for plans to nearly double the size of its Alberta Clipper line taking oil sands crude to the Midwest, saying it can put the oil in another pipeline to cross the border.

In a June letter to the U.S. State Department's Office of Environmental Quality and Transboundary Issues, David Coburn, an attorney for Enbridge's U.S. affiliate, said the company will connect the Alberta Clipper line to its existing 390,000 barrel per day (bpd) Line 3 pipeline on both sides of the border near Gretna, Manitoba.

The company believes the plan will let it ship the crude without waiting for the permit it needs from President Barack Obama for Alberta Clipper's border crossing, while the volume of oil on the two lines will still be within what is currently permitted.

"Enbridge intends to initiate construction of the interconnections in both Canada and the United States in the coming weeks," the letter said.

"The construction and operation of the U.S. interconnections does not require any federal, state, and/or local approvals. ... Canadian approvals, through a simplified notice process, have been obtained."

Enbridge wants to boost the size of the 450,000 bpd Alberta Clipper line to 800,000 bpd to accommodate rising production from the oil sands and relieve squeezed pipeline capacity. It has already delayed the first 125,000 bpd phase of the expansion of the Hardisty, Alberta, to Superior, Wisconsin, line as it waits for the Presidential approval needed for the project's border crossing.

The plan is being opposed by the same U.S. environmental groups that also want the Obama Administration to block TransCanada Corp's Keystone XL pipeline, which has been waiting more than five years for a Presidential permit.

"Enbridge has devised a scheme to transfer the dirty tar sands crude from Alberta Clipper to another pipeline, Line 3, just north of the border, then re-transfer it back to Alberta Clipper," a group of environmental organizations, including the National Wildlife Federation and the Sierra Club, said in a release. "This blatant scheme to move up to twice the amount allotted in Enbridge's permit (is) ... a clear misinterpretation of both the letter and the spirit of the law."

Under its plan, Enbridge will move 180,000 bpd of crude onto its Line 3, 1.5 miles north of border, then return it to Alberta Clipper 16 miles south of the border, keeping the amount of oil shipped on both line below existing approvals.

Terri Larson, a spokesman for the company, said in an email the State Department has confirmed the plan does not require further approvals and work on the interconnections is expected to be complete next month. (Reporting by Scott Haggett. Editing by Andre Grenon)

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