Private Pipeline Project

In a move that advances construction of a $5.2 billion crude-oil pipeline from Canada to Midwestern refineries, the South Dakota Public Utilities Commission last week signed off on a private construction bond deal.

The $3 million deal would be issued by TransCanada Keystone to pay for any damage to local roads and bridges during construction of the pipeline.

The move comes three months after the three-member utility regulatory body approved a permit for the pipeline project, which will stretch 220 miles through 10 counties in the state. TransCanada is required to set aside $3 million this year and $12 million next year to cover possible damage during construction in 2009.

The pipeline runs 2,148 miles, of which 1,379 is in the U.S. It is expected to transport 435,000 to 591,000 barrels of oil daily from Canada to refineries in Illinois and Oklahoma. The project still faces legal challenges from environmentalists and landowners.

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