Massive pipeline project to fuel thousands of jobs

Enbridge spending $5.3 billion on line replacement program

An Enbridge Inc. pipeline project spanning roughly 600 kilometres across Saskatchewan has begun construction and is expected to create thousands of jobs before it’s completed in 2019.

Canada’s biggest pipeline operator says it plans to spend $5.3 billion on the largest project in its history, which involves replacing its Line 3 pipeline running from Hardisty, Alta., to Gretna, Man.

The new, 36-inch-diameter pipeline will be adjacent to the original, which was constructed in the 1960s of steel pipe wrapped in epoxy tape. The original will be decommissioned in late 2019 — purged of crude, cleaned and filled with nitrogen so the pipe doesn’t buckle.

“The safety of our system and the safety of this pipeline is the primary reason for undertaking this work,” said Guy Jarvis, Enbridge’s vice-president of liquids pipelines.

“It also means that we don’t have to continually be working on our right-of-way, disturbing land owners and communities to do all of the maintenance work that’s required on the existing line.”

“There’s been significant advancements in terms of the pipeline coatings.”

Work on the project’s initial phase began Thursday and includes 405 kilometres of new pipeline in Alberta and Saskatchewan, ending in Loreburn, 47 kilometres east of Davidson.

The second piece will run from Rosetown to west of Regina.

The project as a whole is expected to create more than 7,800 direct and indirect jobs in Saskatchewan, plus financial spinoffs and tax revenue.

Jarvis said “virtually all” of the steel used in the project is coming from Evraz North America Ltd.’s facility in Regina, and about half of the 1,600 people working on the project this summer will be based in Saskatchewan.

Jarvis said Enbridge extensively engaged with landowners and Indigenous communities on the project. The company estimates the Line 3 replacement will benefit Indigenous communities to the tune of $50 million in 2017.

“We want these Indigenous communities included, to have opportunities to participate in the business opportunities and the jobs that come from this project,” Jarvis said.

The cost of the Line 3 project has risen by nine per cent since it was announced in 2014. Jarvis said it will be funded through a surcharge on the toll oil producers pay to transport crude through the “common carrier” line once it’s completed.

Asked whether the project represents an attempt by the Calgarybased company to preserve its market share in the face of projects like TransCanada Corp.’s proposed Energy East pipeline, Jarvis replied, “not directly.”

“I think this is about the replacement of this pipeline. We know that being safe is our top priority (and) it’s important to us that this line get replaced,” he said.

This is the second billion-dollar oilfield project announced in the province recently. Late last year, Husky Energy Inc. said it plans to spend $1 billion on three new steam-assisted heavy oil extraction plants in west-central Saskatchewan.

The Line 3 pipeline continues through North Dakota, Minnesota, and ending in Superior, Wisc.