Enbridge's controversial Line 3 pipeline project 'substantially complete,' will be in service Oct. 1

Enbridge says work on the 1,765-kilometre pipeline replacement is now substantially complete. The $9.3-billion project will carry oil from Alberta to an Enbridge terminal in Wisconsin.

Project could add 370,000 barrels per day of crude oil export capacity from Western Canada into U.S.

In this Aug. 21, 2017, file photo, a pipe fitter works on the replacement of Enbridge Energy's Line 3 crude oil pipeline stretch in Minnesota. (Richard Tsong-Taatarii/Star Tribune/The Associated Press)

Enbridge Inc.'s Line 3 pipeline replacement project, a critical piece of export infrastructure for Canada's energy sector, will be in service on Friday.

The pipeline giant said Wednesday the 1,765-kilometre Line 3 — which will carry oil from Alberta to Enbridge's terminal in Superior, Wis. — is "substantially complete."

The $9.3-billion project is the first major Canadian pipeline project to be completed since Enbridge's Alberta Clipper project, which was finished in 2015. The replacement of Line 3 is expected to add about 370,000 additional barrels per day of crude oil export capacity from Western Canada to refineries in the U.S. Midwest.

"This is a big win, for sure," said Leo Golden, Enbridge's vice-president of Line 3 Project Execution in an interview. "I think part of it has been just how long it has taken us to get here."

The Line 3 project was first announced in 2014, but ran into opposition from environmental groups and Indigenous groups along the way. Opponents of the project have said the Line 3 expansion will accelerate climate change and also poses a risk of oil spills in environmentally sensitive areas.

The last leg of the $9.3-billion project to be completed was the 542-kilometre Minnesota segment of the pipeline. Other segments had already been placed into service in Canada, North Dakota and Wisconsin, but in Minnesota Enbridge faced court challenges and protests by project opponents.

In June, Enbridge was handed a victory by the Minnesota Court of Appeals, which affirmed the approvals granted by independent regulators that allowed construction on the Minnesota leg to begin last December.

Golden said Enbridge is still waiting to see if opponents of the project appeal that decision to the Minnesota Supreme Court.

"We assume that they're going to, but they haven't yet," he said.

Enbridge said the Minnesota leg of the project was the most studied pipeline project in that state's history, and that project approvals from federal, state and local agencies came after 71 public comment regulatory meetings and over 3,500 community engagement meetings.

Enbridge has said the Line 3 project was necessary to replace and expand a deteriorating pipeline built in the 1960s. The state-of-the-art, thicker-walled pipe used for the replacement will ensure a "safe, reliable supply of North American crude oil to U.S. refineries," the company said Wednesday.

"After more than eight years of many people working together, extensive community engagement, and thorough environmental, regulatory and legal review, we are pleased that Line 3 is complete and will soon deliver the low cost and reliable energy that people depend on every day," said Enbridge chief executive Al Monaco in a news release.

"From day one, this project has been about modernizing our system and improving safety and reliability for the benefit of communities, the environment and our customers."

Lack of pipeline infrastructure

Canada's energy sector has been hamstrung by a lack of pipeline infrastructure in recent years. An IHS Markit report from December found that delays in the expansion of the export pipeline capacity have contributed to lower prices in Western Canada, representing a loss of $17 billion for the crude oil industry over the last five years.

In June, TC Energy Corp. cancelled its Keystone XL Pipeline project, leaving Enbridge's Line 3 project and the Trans Mountain Pipeline project (owned by the federal government) as Canada's main pipeline projects. The Trans Mountain pipeline project, which twins a line from Alberta to B.C., is expected to be in service by December 2022.

Tristan Goodman, president of industry group The Explorers and Producers Association of Canada, said the Line 3 announcement is a positive step that will help to ensure Canadians get a fair price for their energy products.

"As the United States and the U.K. have recently or are currently experiencing, there remains a significant demand for hydrocarbon energy around the world," Goodman said in an email. "The Line 3 expansion is a recognition of the ongoing demand for this essential product and this expansion supports Canadians and the Canadian industry."

The news was also celebrated by the governments of Alberta and Saskatchewan, which heralded it as a step forward for hundreds of thousands of Canadian oil and gas workers in those provinces.

"The completion of Enbridge's Line 3 replacement is a significant milestone for Alberta, Canada and all of North America. It's fantastic news for our province's economic recovery," said Alberta Premier Jason Kenney in a statement.

"This project is good news for Saskatchewan and its producers, as 70 per cent of our oil runs through the Enbridge Mainline, which includes Line 3," said Saskatchewan's Energy and Resources Minister Bronwyn Eyre in a statement.

Enbridge said it was proud of its efforts to engage Indigenous communities along the pipeline route. It said more than 1,500 Indigenous people worked on the Line 3 replacement project in the U.S. and Canada, and in Minnesota, Native Americans made up seven per cent of the Line 3 workforce.