Twenty rail cars stacked with 30-inch pipe rolled into Milton, N.D., this weekend.

It's the first sign of a massive $5.2 billion TransCanada Keystone Pipeline project that is scheduled to begin construction through North Dakota in May. The North Dakota section of the project will cost about $300 million.

When it begins, North Dakotans will see a flurry of construction activity all along the route, from Walhalla to Cogswell, in Sargent County.

The project still faces a potential legal challenge. While it has been approved by the North Dakota Public Service Commission, the Dakota Resource Council and a half dozen North Dakota residents have appealed the PSC permit, claiming the regulatory agency did not comply with state law and failed to consider major environmental impacts.

Still, the U.S. State Department has granted approval for construction to begin on the 1,830-mile project that will stretch from Hardisty, Alta., to Illinois and, later, to Oklahoma. The pipeline will cut across 218 miles of North Dakota.

The North Dakota project will be split into two parts: Walhalla to Valley City and Valley City to the South Dakota border. As many as 500 workers -- mostly union labor, welders, operators, laborers and Teamsters -- will be hired for each half of the North Dakota project.

Temporary offices and equipment storage yards will be set up in and around several communities, according to Jeff Rauh, Keystone project representative. These hubs of activities include Walhalla, Grafton, Emerado, Cooperstown and Valley City. The rural Emerado site will be located north of the Grand Forks Air Force Base.

The Grafton site, located near the State Development Center on the west edge of town, will serve as a major headquarters for the northern North Dakota portion of the project.

The pipe is being stored at the CHS Milton elevator complex, which includes a 110-rail-car shuttle loading facility. From there, pipe will be delivered to job sites along the northern North Dakota route.

The company will provide safety and environmental offices, labor offices and parking areas for workers, who will be transported to the job sites.

Rauh said residents will see workers for two to three months, as the pipeline extends southward at a rate of about 1.5 miles per day. The Grafton site, which will occupy a space of about 1,200-by-1,200 feet, may be active for a longer period.

The general contractor for the northern half of the North Dakota project is Henkels & McCoy, which is based in Pennsylvania. Its pipeline headquarters is in Tulsa, Okla.

Once work begins, crews will perform field prep duties, then clear land and begin digging a trench to place the 30-inch pipe four feet underground. Many of the workers will be looking for temporary housing along the route, although many bring their own campers, according to Rauh.

Hiring for the northern portion of the project is being handled through union locals in Fargo.

Michels Corporation, based in Brownsville, Wis., is the general contractor for the southern half of the North Dakota project. The company will hold a job fair April 9 in Valley City for people interested in working on that section.

"The purpose of the job fair is to expand ranks of the unions," Rauh said. "There's a bit of a shortage of labor, and they're hoping to increase the numbers."

Construction through North Dakota is expected to be nearly completed this year. The target date to finish the entire pipeline is late in 2009. When it becomes operational, the pipeline will transport about 590,000 barrels of crude oil daily from Alberta to Illinois and Oklahoma.

The company will use a horizontal drilling method to cross the scenic Pembina and Sheyenne rivers in North Dakota, eliminating the need to cut trees in the environmentally sensitive areas.

Copyright (c) 2008, Grand Forks Herald, N.D. Distributed by McClatchy-Tribune Information Services.

Related Project
Keystone Pipeline
Facility Type: Pipeline Owner: TransCanada (developer and operator); ConocoPhillips
Scope: New Construction Location: Hardisty, Alberta to Cushing, Okla. and Patoka, Ill. United States