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Enbridge says additional permit requirements will delay start of Line 5 tunnel project

Credit: REUTERS/CARLOS OSORIO

The U.S. Army Corps of Engineers' decision to undertake a tougher environmental review of Enbridge Inc's proposed oil pipeline tunnel under the Great Lakes will delay the start of construction on the project, the company said on Wednesday.

By Nia Williams

CALGARY, Alberta, June 23 (Reuters) - The U.S. Army Corps of Engineers' decision to undertake a tougher environmental review of Enbridge Inc's ENB.TO proposed oil pipeline tunnel under the Great Lakes will delay the start of construction on the project, the company said on Wednesday.

The Canadian company had planned to start building the $500 million tunnel along the lakebed of the Straits of Mackinac, connecting Lakes Huron and Michigan, this year. The tunnel will house the Line 5 oil pipeline, which ships 540,000 barrels per day of oil and refined products from Superior, Wisconsin, to Sarnia, Ontario, and is a key link in Enbridge's crude export network.

The 68-year-old pipeline is the subject of an ongoing legal battle between Enbridge and the state of Michigan that has also embroiled the Canadian government. Michigan ordered the pipeline to shut down over concerns it could leak into the Great Lakes, an order than Enbridge ignored.

"The decision by the U.S. Army Corps of Engineers (USACE) to complete an environmental impact statement instead of an environmental assessment (EA) for the Great Lakes Tunnel project will lead to a delay in the start of construction on this important project," Enbridge spokesman Ryan Duffy said in an email.

The company had expected the tunnel to be operational by 2024, but environmental impact statements can take years. Duffy said Enbridge was still evaluating the impact on its timeline.

"This announcement comes after tens of thousands of citizens voiced concern over Enbridge’s Line 5 tunnel permitting application because it lacked critical details," said Beth Wallace of the National Wildlife Federation, adding the comprehensive review would hold Enbridge accountable for the project's impact on water, land and climate.

(Reporting by Nia Williams; editing by Rosalba O'Brien and Jonathan Oatis)

((nia.williams@thomsonreuters.com; +1 403 531 1624; Reuters Messaging: nia.williams.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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