TC Energy Corp.’s Keystone XL oil-sands pipeline was a dealt a setback with a judge’s ruling that the U.S. Army Corps of Engineers improperly approved a streamlined permit process without fully evaluating the impact on endangered species.

In a legal challenge brought by environmental groups, a federal judge in Montana on Wednesday ordered the agency to conduct further review and barred it from authorizing dredging in waterways covered by the permit.

“We have received the judge’s ruling and continue to review it,” Calgary-based TC Energy said in a statement. “We remain committed to building this important energy infrastructure project.”

The stakes in the legal challenges to Keystone XL rose higher than ever last month, when Canada’s oil-rich province of Alberta announced $5.3 billion in aid to help finance the conduit’s construction and TC Energy formally committed to building the line. Already, the project was seen as a key lifeline for Alberta’s oil-sands producers, which have suffered from a lack of pipeline capacity that has weighed on local crude prices and restrained their ability to boost output.


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