Page 8 - NorthAmOil Week 24 2021
P. 8

NorthAmOil                            PIPELINES & TRANSPORT                                       NorthAmOil


       Minnesota court upholds




       Line 3 replacement permit




        MINNESOTA        THE Minnesota Court of Appeals upheld this   Enbridge is replacing Line 3 because the
                         week a state regulator’s approval for Enbridge’s  ageing pipeline, built in the 1960s, is running at
                         Line 3 oil pipeline replacement project, in a  roughly half of its capacity owing to corrosion.
                         decision that eliminates a potential delay for the  The replacement project will raise Line 3’s capac-
                         pipeline.                            ity to 760,000 barrels per day (bpd) of oil, boost-
                           A three-judge panel voted 2-1 on June 14 to  ing takeaway capacity from Alberta’s oil sands.
                         affirm a certificate of need and routing permit   The pipeline is already complete in Canada,
                         granted to Enbridge by the Minnesota Public  Wisconsin and North Dakota, and around 60%
                         Utilities Commission (PUC).The decision came  complete in Minnesota. After delays earlier in
                         as a blow to environmental and indigenous  the regulatory approval process, the replacement
                         groups that have been seeking to derail the Line  is now on track to enter service in the fourth
                         3 replacement in the courts.         quarter of this year.
                           “While reasonable minds may differ on the   “We see this as the last key regulatory hurdle
                         central question of need for replacement Line 3,  for the project,” Scotiabank analyst Robert Hope
                         substantial evidence supports the commission’s  wrote in a June 14 research note, which described
                         decision to issue a certificate of need,” wrote  the Minnesota court ruling as “a sigh of relief”.
                         Judge Lucinda Jesson.                Hope added that while there are a number of
                           The ruling said the PUC had addressed con-  other legal issues outstanding for the project,
                         cerns about the impacts of potential oil spills on  Scotiabank does not expect them to slow the
                         the Lake Superior watershed and had selected a  pipeline’s completion at this point. Earlier, ahead
                         route for the replacement pipeline that was based  of this week’s court ruling, he had written that
                         on tribal sovereignty and minimised environ-  regardless of the outcome, the case was expected
                         mental impacts.                      be appealed against in the US Supreme Court.™

                                                    INVESTMENT

       Tourmaline continues Montney consolidation




       with Black Swan acquisition




        BRITISH          CANADA’S Tourmaline Oil announced last  complement its core Gundy development.
        COLUMBIA         week that it had struck a deal to acquire pri-  Additionally, along with the more recent Polar
                         vately owned Black Swan Energy for CAD1.1bn  Star Canadian Oil and Gas, Chinook Energy
                         ($897mn). The purchase marks Tourmaline’s  and Saguaro transactions, the deal is anticipated
                         second move this year to expand in Western  to establish Tourmaline as the largest current
                         Canada’s Montney play, which straddles British  North Montney producer, with the most exten-
                         Columbia and Alberta. In April, the company  sive future drilling and project inventory. The
                         acquired 50% of the assets of Saguaro Resources  company now expects its production to average
                         in the play, and entered into a joint venture  roughly 500,000 barrels of oil equivalent per day
                         agreement to develop them.           (boepd) by mid-2022.
                           Tourmaline said in its June 11 statement that   Analysts at brokerage ATB Capital Markets
                         the deal to buy Black Swan consisted of 26mn  described the Black Swan assets a “hand in glove”
                         of its common shares and the assumption of  fit with Tourmaline’s other recent acquisitions.
                         net debt up to a maximum of CAD350mn   Tourmaline said it envisions the North Mont-
                         ($285mn), including all transaction costs. The  ney as the key region for supplying Canadian
                         acquisition is expected to close in the second  LNG, as well as being the primary growth driver
                         half of July.                        in the entire Western Canadian Sedimentary
                           The purchase includes existing proven and  Basin (WCSB) over the next 10 years.
                         probable (2P) reserves of 491.9mn barrels of oil   Other producers are also expanding in the
                         equivalent (boe), 1,600 horizontal drilling loca-  Montney, as a wave of consolidation sweeps both
                         tions and 230,000 net acres (931 square km) of  the US and Canada. In April, ARC Resources
                         Montney rights. All of the acquired reserves are  closed its CAD2.7 ($2.2bn) merger with Seven
                         located in the Aitken core development area.  Generations Energy, creating the largest pro-
                           The company said the acquisition would  ducer across the whole of the Montney.™

       P8                                       www. NEWSBASE .com                           Week 24   17•June•2021
   3   4   5   6   7   8   9   10   11   12   13