Resource World Magazine

84 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 2 0 Oil Patch Report by Bruce Lantz A pipeline doesn't have to be a pipe dream, even in today's environ- mentally-sensitive world. Just ask three firms who are building major pipelines in North American today. Despite roadblocks thrown up by gov- ernment over-regulation, environmental naysayers and industry fluctuations, Enbridge, TC Energy and Trans Mountain are well on their way to building the infra- structure needed to get the continent's energy to where it's needed most. This has not been without challenges. Pipeline opponents characterize even the smallest pipeline spill as a harbinger of doom and promise more to come if the projects proceed. But now, with the need for Canadian oil and natural gas predicted to rise by as much as 50% for oil and 30% for natu- ral gas by 2040, based largely on world demand, observers are happy with news that three major pipelines are set to come online in the early 2020s. Enbridge Line 3 went in service in mid-December, while Keystone XL is set to come online in 2022 and the Trans Mountain Expansion (TMX) should open up in 2023. The lines will hit capacity in 2021, 2023 and 2024, respectively. Line 3 and Keystone XL will allow for the effi- cient transportation of Canadian oil into the United States while the TMX will more than double the amount of oil that can be transported from Alberta to the British Columbia coast, for export to meet the expanding demand overseas. ENBRIDGE LINE 3 It has been a long and gruelling battle, but Enbridge Inc. [ENB-TSX, NYSE] has com- pleted the 1,070-km Canadian section of its Line 3 Replacement Project, with the US section due to enter service in late 2020. Line 3, a crude oil pipeline running from Edmonton, Alberta to Superior, Wisconsin, announced in 2013 and approved by Canada's National Energy Board in 2016, is an integral part of Enbridge's Mainline System. Construction in Canada began in 2017. The company is spending $5.3 billion on the Canadian portion of the pipeline, which hooks into Enbridge facilities at Cromer and Gretna, Manitoba, and $2.9 billion on the US section. The replacement was deemed necessary to improve safety, reduce maintenance costs and disruptions for landowners, and restore historical oper- ating capabilities. A new 36-inch diameter pipeline is replacing 34-inch pipe, doubling capacity to 760,000 bpd. "The replacement of Line 3 was an essen- tial, safety-driven project and we are very pleased with the exceptional coordination between Enbridge, our construction man- agement team and primary contractors," said Communications Manager David Coll. "We often say it takes a community to build a pipeline and we are truly grate- ful and humbled by the tremendous support we've received across Alberta, Saskatchewan and Manitoba for this proj- ect over these past six years." Coll credits support from landowners, municipalities, First Nations and Metis, regulators, politicians, construction con- tractors, unions, chambers of commerce, goods and services providers and custom- ers for bringing the project to fruition. "It's taken the support of all these groups to get this project built in Canada." Meanwhile, although the Wisconsin segment of the project entered service in May 2018, Enbridge is awaiting final permitting to begin construction in Minnesota. "Enbridge continues its work with the appropriate regulatory agencies to secure permits and approvals at the federal, state and local levels before the start of construc- tion," said Coll, adding that the project has "very strong support" from Minnesota unions, tribes, communities, local govern- ments and businesses. He acknowledged the opposition of anti-pipeline activ- ists but said the company's transparent approach to following the laws, regulations and standards for safe pipeline operation has won supporters. "We've been in operation for more than 70 years and have operations in numerous jurisdictions throughout North America so we're used to dealing with different governments," Coll said. "Our focus is on ensuring governments understand the fun- damentals of what we do. "In all jurisdictions it is essential to earn the support of governments . . . And regulatory agencies as well as landown- ers, Indigenous communities and other interested parties. This can be challeng- ing for large, linear projects like pipelines that cross several jurisdictions and involve multiple stakeholders. With the Pine 3 pipeline replacement – Enbridge's largest capital project and the largest community engagement effort in our history – we have proven it can be done." KEYSTONE XL The $8 billion Keystone XL pipeline has had more than its fair share of problems since being commissioned in 2010 to allow TC Energy Corp. [TRP-TSX, NYSE], formerly TransCanada Corp., to deliver oil from Alberta to refineries in Illinois and Texas, helping to offset the 7 million bpd the US now imports from Iraq, Saudi Arabia, Mexico and Venezuela. First, in early 2008, ConocoPhillips acquired a 50% stake in the project, only to sell it back little more than a year later. Canadian pipeline projects progressing

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