Army Corps easement would unlock $1.4 billion in Dakota Access financing
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By Liz Hampton
HOUSTON (Reuters) - Energy Transfer Partners on Thursday said an easement from the Army Corps of Engineers to drill under Lake Oahe would unlock an additional $1.4 billion in financing for its Dakota Access Pipeline.
The company has already drawn $1.1 billion from its $2.5 billion credit facility but needs the easement, a right to use the property without possessing it, to access the remaining $1.4 billion required for the project. Energy Transfer expects the U.S. government to make a decision on whether to grant the easement for Dakota Access "anytime" now, executives said on Thursday during the company's third-quarter earnings call.
Banks financing the $3.7 billion Dakota Access Pipeline have come under increased pressure from activists to pull their support of the project amid concerns that the line would desecrate sacred lands and that a spill might contaminate drinking water.
Energy Transfer this week said it was mobilizing equipment to drill under Lake Oahe, the water source that has been a focus of the protests surrounding the project, in anticipation of being granted the easement. The mobilization will take two weeks, after which the company expects to begin construction.
Drilling under the lake would take about 90 to 120 days, executives said on Thursday, which would put the pipeline on track to begin service in the first quarter of 2017.
Earlier this week, Norwegian bank DNB said it would reconsider its participation in financing the project if the concerns of tribes were not addressed. Meanwhile, Citigroup Inc on Tuesday said it had discussed its concerns with Energy Transfer and urged the company to reach a resolution with the Standing Rock Sioux tribe.
Environmental and Native American groups opposed to the pipeline are planning massive protests around the country on Nov. 15 at offices of the Army Corps of Engineers.
Protestors believe the federal agency, which is responsible for the easement, "'fast-tracked' the Dakota Access Pipeline approval process, neglecting tribal consultation and environmental review," according to a statement released this week by CREDO Action, an activist network opposed to the project.
Tuesday's election of Republican Donald Trump, who has voiced support for other pipeline projects such as TransCanada's Keystone XL, may be a positive development for the Dakota Access, which saw construction halted by the U.S. government in September.
Energy Transfer Chief Executive Kelcy Warren on Wednesday said the election's outcome was "favorable" for the Dakota Access project as well as other energy infrastructure projects.
Shares of Energy Transfer were up more than 3 percent on Thursday, trading around $38 per share, the highest level since early September, when the U.S. congress halted construction on the project.
The company said on Thursday it was still working to get firm shipping commitments for the 570,000-barrel-per-day pipeline, adding that the system is contracted over the 450,000 bpd previously disclosed.
The 1,172-mile (1,885 km)pipeline will transport crude from the Bakken shale of North Dakota to the Midwest, and connect to the U.S. Gulf Coast.
(Reporting by Liz Hampton; Editing by Jonathan Oatis and Andrew Hay)
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