September 26, 2017 / 11:11 AM / 2 years ago

Minnesota public hearings begin for Enbridge's $6.5 billion oil pipe expansion

CALGARY, Alberta (Reuters) - Regulatory hearings for Enbridge Inc’s (ENB.TO) (ENB.N) C$8.2 billion ($6.5 billion) Line 3 crude oil pipeline upgrade will begin on Tuesday in the U.S. state of Minnesota, which presents the last hurdle for the biggest project by North America’s top pipeline operator.

File Photo: Pipelines run to Enbridge Inc.'s crude oil storage tanks at their tank farm in Cushing, Oklahoma, March 24, 2016. Picture taken March 24, 2016. REUTERS/Nick Oxford

Until mid-November, the Minnesota Public Utilities Commission will hear from groups including landowners, aboriginals and environmentalists, many of whom fiercely oppose the project, while the energy industry supports it.

The commission is not due to make its final decision until next April for Enbridge’s project of replacing its aging pipeline.

The Line 3 replacement project from Hardisty, Alberta, to Superior, Wisconsin, doubles the capacity of the existing line, - which was built in the 1960s and has been running below capacity - to its original 760,000 barrels per day.

The bulk of the line’s U.S. portion passes through Minnesota, the last jurisdiction to review it. A decision to not grant permission would bar work for construction in state, although the company can appeal, and the current line remains operational.

Enbridge spokesman Michael Barnes said: “We are eager for the hearings to get under way and the facts to be presented. This will be a detailed process, which will show the need for the replacement project.”

In a surprise move this month, Minnesota’s Department of Commerce opposed the upgrade, saying refineries in the state and the upper Midwest “are not short of physical supplies of crude oil, and that they have little room to increase total crude runs.”

Producers in Canada’s oil heartland of Alberta, whose landlocked crude trades at a discount to the U.S. West Texas Intermediate benchmark CLc1, say they need additional export capacity to attain higher prices.

Aboriginal groups and environmentalist say they are concerned about the potential for leaks and what they say are the project’s contributions to climate change. Further they say, parts of the project involve rerouting, making it akin to a new pipeline than the replacement of an old one.

Enbridge has already begun Line 3 construction in Canada and the state of Wisconsin, where it has obtained all approvals.

Enbridge said last month the Line 3 replacement project will cost 9 percent more than its previous forecast, citing in part regulatory delays

Reporting by Ethan Lou; Editing by Marguerita Choy

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