Enbridge, North America's largest pipeline operator, said the project from Hardisty, Alberta, to Superior, Wisconsin, will cost C$8.2 billion ($6.52 billion), 9 percent more than its previous forcecast.

The increased cost will be offset, however, by lower operating costs and a stronger U.S. dollar, and the project remains on track for service in the second half of 2019, Enbridge said.

Construction officially began in Canada on Thursday.

Chief Executive Al Monaco said on a conference call Line 3 had obtained permits in Canada and North Dakota and Wisconsin, but still required regulatory approval from Minnesota, which Enbridge expects in the third quarter.

The Line 3 replacement project doubles the capacity of the existing line to 760,000 barrels per day and is the largest project in Enbridge's history, according to the company.

In a letter on Wednesday, nine Minnesota legislators asked the governor to extend the deadline on which a state body must decide on Line 3's environmental impact statement.

Asked whether Enbridge could make up for the capacity elsewhere if the project got delayed in Minnesota, Monaco said: "The capacity will be restored once the full line gets replaced."

The company is unlikely to be affected by rival pipeline projects, TransCanada's Keystone XL and Kinder Morgan Canada Ltd's Trans Mountain, Monaco said.

"In terms of attracting spot barrels, we would see us as being extremely competitive," he said. "Refiners in the U.S. Midwest and Gulf Coast area like the diet of what we're moving."

Enbridge's second-quarter profit was hurt by outages and production disruptions in its liquids pipeline business. The company said it expects the business to improve as production and throughput ramps back up on its mainline system.

Still, quarterly profit more than tripled, helped partly by the company's $28 billion purchase of natural gas pipeline company Spectra Energy Corp.

Net income attributable to shareholders rose to C$919 million ($729.77 million), or 56 Canadian cents per share, in the second quarter ended June 30, from C$301 million, or 33 Canadian cents per share, a year earlier.

Excluding one-time items, the company earned 41 Canadian cents per share. Analysts on average had expected earnings of 48 Canadian cents per share, according to Thomson Reuters I/B/E/S.

(Reporting by Ahmed Farhatha in Bengaluru and Ethan Lou in Calgary, Alberta; Editing by Tom Brown and Andrew Hay)