Canada to Rule on Two Pipelines; Kinder Morgan Still Up In Air

Canada will this week decide the fate of two Enbridge Inc pipelines but is keeping quiet about its verdict on Kinder Morgan Inc's plans to more than double the capacity of its Trans Mountain line, a move environmentalists strongly oppose.

The Liberal government is widely expected to veto Enbridge's Northern Gateway pipeline from Alberta's oil sands to the province of British Columbia on the Pacific Coast. Prime Minister Justin Trudeau has long opposed the project, citing the proposed routing through a rain forest.

Ottawa does look set to allow Enbridge to replace the Canadian segments of its Line 3, which takes crude from Alberta to Wisconsin. Canada's energy regulator approved the project in April, albeit with 89 conditions.

Trudeau is under pressure both from environmentalists and the energy industry, which says it needs more pipelines to ease transport bottlenecks in Alberta.

Natural Resources Minister Jim Carr has made it clear that cabinet has until the end of Friday to make both Enbridge decisions, said spokesman Alexandre Deslongchamps. Trudeau leaves for a week-long African trip on Wednesday.

Northern Gateway foundered amid protests from green and aboriginal groups that are now targeting Trans Mountain. But the plan to update Line 3, which sources say will switch from carrying light oil to synthetic crude, attracted virtually no attention.

"Most people are expecting it goes forward," said AltaCorp Capital energy infrastructure analyst Dirk Lever.

The upgrade would allow Enbridge to run Line 3 at its maximum capacity of 760,000 barrels per day. It is currently shipping 390,000 bpd because of voluntary pressure restrictions.

"It's not adding to capacity," said Friends of the Earth policy adviser John Bennett. "I haven't seen any chatter about it at all."

There is, however, plenty of discussion about Enbridge's plans to build a second pipeline next to its Trans Mountain line from Alberta to British Columbia. Greens say the risk of a spill is too great.

Opponents promise massive protests against the project, which some Liberals fear could hurt the party in a federal election set for 2019. Earlier this month a Liberal legislator from British Columbia urged Trudeau to veto the line.

Environmental groups say they expect Carr to approve Trans Mountain by the Dec. 19 deadline. He said last week that Canada needed to sell oil to Asia to diversify exports away from the United States.

Deslongchamps said Carr was committed to a Trans Mountain verdict by Dec. 19.

(Reporting by David Ljunggren)