(Recasts with comments on Line 3 project)
By Rod Nickel and Shanti S Nair
Feb 15 (Reuters) - Canadian pipeline operator Enbridge Inc was not surprised by renewed opposition from Minnesota's state government to its C$9 billion Line 3 but still expects the oil pipeline replacement to enter service by year-end, its chief executive said on Friday.
The pipeline passes through Minnesota as it runs from Alberta to Wisconsin. Line 3, opened in 1968, runs at half its capacity because of its age and corrosion. Replacement would allow Enbridge to restore its flow to 760,000 barrels per day.
Canadian oil producers say the project is critical to expanding their congested transport options, but some groups in Minnesota say it would harm the environment and indigenous areas.
Minnesota Gov. Tim Walz said this week that the state's commerce department will ask Minnesota's Public Utilities Commission to reconsider its Line 3 approval.
"It's common for regulatory decisions to be challenged," Enbridge Chief Executive Al Monaco said on a quarterly conference call. "Although we certainly don't agree with (the commerce department's) views, we're not surprised by the filing."
Minnesota's commerce department had argued to the commission in June that Enbridge had failed to prove the pipeline is necessary.
Pending the state's appeal and Enbridge's applications for federal, state and municipal permits, its construction schedule in Minnesota is flexible to bring the 1,031-mile (1,660-km) pipeline into service as planned, Monaco said.
Construction crews need to be working by June to meet the schedule, said Guy Jarvis, president of Enbridge's liquids pipelines business.
Enbridge shares rose 0.5 percent in Toronto to C$47.57.
Enbridge topped analysts' estimates for quarterly profit on Friday, as it moved more crude oil and refined products along its pipelines.
The Calgary, Alberta-based company said it transported 2.7 million bpd of crude oil on its Mainline system across Canada and the United States during the quarter, up from 2.6 million bpd in the year-ago quarter.
Net income rose to C$1.09 billion ($820.35 million), or 60 Canadian cents per share, in the fourth quarter, from C$207 million, or 13 Canadian cents per share. On an adjusted basis, the company earned 65 Canadian cents per share. Analysts had expected 62 Canadian cents per share, according to IBES data from Refinitiv. ($1 = 1.3287 Canadian dollars) (Reporting by Rod Nickel in Winnipeg, Manitoba and Shanti S Nair in Bengaluru; Editing by Shailesh Kuber and Dan Grebler)