Page 6 - NorthAmOil Week 33 2022

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Enbridge wins battle to keep

Line 5 case in federal court

NORTH AMERICA CANADA’S Enbridge has won a victory in its The pipeline company is also seeking to
ongoing battle with the State of Michigan to keep replace the underwater section of Line 5, hous-
its Line 5 pipeline operating after a judge rejected ing it in a new tunnel. A federal review of the
Michigan’s bid to move jurisdiction over the law- plan for the tunnel also officially began this
suit to state court. week, when the US Army Corps of Engineers
US District Judge Janet Neff sided a second launched a 60-day comment period on the
time with Enbridge, which maintains that regu- project. Given the controversy surrounding
Michigan’s opposition lation of Line 5 is a federal matter and that legal the plan, thousands of public comments are
to Line 5 relates to the arguments about whether it should continue expected to be received.
underwater section of operating should therefore be handled in federal Neff had reached the same conclusion about
the pipeline. court. jurisdiction over Line 5 being a federal matter in
Line 5 is part of a network that moves Cana- a separate lawsuit filed by Whitmer. This week’s
dian oil and natural gas liquids (NGLs) to refin- ruling involved a separate 2019 case by Michigan
eries in both countries. Michigan Governor Attorney General Dana Nessel, also seeking to
Gretchen Whitmer has ordered Enbridge to shut down Line 5.
shut Line 5, arguing that the underwater section Indeed, Neff’s ruling criticised Nessel for
of the pipeline, which passes through the Straits repeating arguments in favour of applying state
of Mackinac, poses an environmental threat to law that she had previously rejected. It would be
the Great Lakes. However, Enbridge has refused “absurd” to have one Line 5 case decided in state
to comply, arguing that Whitmer is overstepping court and another in federal court, she ruled,
her authority and that Line 5’s operation falls also accusing Nessel’s team of “gamesmanship ...
under federal jurisdiction. procedural fencing and forum manipulation”.™

INVESTMENT

Phillips 66 makes offer for DCP Midstream

US PHILLIPS 66 announced this week that it had operates an oil pipeline from West Texas to the
made a non-binding offer to acquire all publicly US Gulf Coast.
owned common units of pipeline operator DCP Phillips 66’s offer to take over DCP is subject
Midstream. Phillips 66 is proposing to acquire to the negotiation and execution of a definitive
the company for $34.75 per share in a deal that agreement, which would need to be approved by
would value DCP at $7.2bn. the board of directors of DCP’s general partner.
The announcement came on the same day If the deal is approved, it will further enhance
that Phillips 66 also said it had raised its exist- Phillips 66’s natural gas liquids (NGLs) business,
ing stake in DCP from 28.26% to 43.31% while which has already been bolstered by its transac-
lowering its interest in Gray Oak Pipeline from tion with Enbridge.
42.25% to 6.50%. This realignment was executed “DCP is a valued business in our portfolio
through the merger of existing joint ventures and enhances our existing value chain from well-
co-owned by Phillips 66 with Enbridge. Phillips head to market, creating a platform for future
66 contributed roughly $400mn in cash as part NGL growth,” stated Phillips 66’s president and
of that transaction. CEO, Mark Lashier, in the announcement about
Thanks to the increased stake, Phillips 66 will the Enbridge transaction.
oversee and manage the joint venture’s interest The acquisition proposal comes around a
in DCP, including the general partner. However, month after Lashier took over as CEO of Phillips
if its acquisition offer is accepted, its control over 66, and would represent his first major move as
the pipeline company will extend further still. head of the company if a transaction goes ahead.
Enbridge, in turn, has taken over as opera- Earlier this year, the company also acquired the
tor of Gray Oak from Phillips 66, having more public units in transportation and storage busi-
than doubled its stake in that company, which ness Phillips 66 Partners.™

P6 www. NEWSBASE .com Week 33 18•August•2022