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Energy Transfer Uses Force Majeure as Shippers Renege on Dakota Access Expansion

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   |    Thursday,July 02,2020

Energy Transfer LP has invoked force majeure in an attempt to force E&P companies to remain committed to its Dakota Access Pipeline expansion, according to a report by Reuters.

Several companies that previously signed on to the project are now saying it's no longer necessary due to the drop in oil prices seen earlier this year.

ETP made the decision after it did not receive the permits from certain shippers by the due date, one source familiar with the matter told Reuters.

The use force majeure will make it more difficult for customers to get out of contractual obligations for the Dakota Access. It additionally gives ETP more time to secure related regulatory approvals.

The customers that voiced concern spoke on the condition of anonymity.

The Dakota Access Pipeline serves operators in the Williston Basin / Bakken Shale play. The pipeline's current capacity is 570 MBPD and the expansion would effectively double existing capacity to 1.1 million BPD.

 


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