Page 8 - NorthAmOil Week 24 2021

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