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Army Corps looks for easement to unlock $1.4B in financing for Dakota Access

Dakota Access

The route of the Dakota Access pipeline goes underneath Lake Oahe in North Dakota.  Energy Transfer is looking for an easement from the US Army Corps of Engineers to drill under the lake, the focus of protests surrounding the project. Phil Konstantin photo.

Dakota Access construction halted by protests

By Liz Hampton

HOUSTON, Nov 10 (Reuters) – Energy Transfer Partners on Thursday said an easement from the Army Corps of Engineers to drill under Lake Oahe will 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. Energy Transfer expects the U.S. government to make a decision on the Dakota Access “anytime” now, executives said on Thursday during the company’s third-quarter earnings call.

The company 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. The mobilization will take two weeks, after which the company expects to begin construction.

Drilling under the lake will take about 90 to 120 days, executives said on Thursday.

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 will destroy sacred lands and that a spill might contaminate drinking water.

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.

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 in North Dakota 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.

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 Chizu Nomiyama and Jonathan Oatis)

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