Despite ND contract extension, Sandpiper Pipeline not moving forward

Body: 

BISMARCK—The North Dakota Public Service Commission extended a contract Friday, Nov. 3, with a firm tasked with inspecting the Sandpiper Pipeline's construction despite the project being shelved more than a year ago.

But that doesn't mean the oil pipeline is being resurrected.

The two-year extension on the contract with Mandan-based Keitu Engineers & Consultants Inc. was included on the commission's consent agenda, meaning it didn't receive an individual vote from the three-member board. The contract requires Keitu to perform inspections and ensure the project is constructed in compliance with siting laws and rules.

Under the original contract, signed in 2014, the state was obligated to pay Keitu a maximum of $39,248. The contract was set to expire at the end of the year, and it can't be extended past the end of 2019.

Enbridge announced plans in September 2016 to suspend the Sandpiper Pipeline because of market challenges and regulatory delays in Minnesota. That news came on the heels of Enbridge Energy Partners and Marathon Petroleum Corp.'s announcement that they would invest in the Dakota Access Pipeline, which went into service this summer.

The 616-mile Sandpiper Pipeline would have run from western North Dakota to near Superior, Wis. In its final leg, between Clearbrook, Minn., and Superior, it would have transported 375,000 barrels of crude oil per day.

Although the project isn't moving forward for now, Public Service Commissioner Julie Fedorchak said there is some reclamation work stemming from preliminary construction that needs to be completed and inspected next spring. She expected the inspection charges to total $3,000 to $5,000 or less.

Enbridge spokeswoman Shannon Gustafson said facility construction initially started at three pump stations has been suspended "until such time as facilities are needed for the North Dakota Pipeline system's future operation." She said the PSC may audit sites where construction was underway "from time to time."

Enbridge's latest construction report, covering the second week in October, said Sandpiper is "not moving forward at this time." The company said it would suspend construction reports.

All pipe associated with the Sandpiper project has been sold and the pipe yard storage sites have been restored and reverted to their respective owners, Enbridge said.