Enbridge’s proposed shift to long-term crude transport contracts on its Mainline pipeline network is drawing the wrath of a rising number of producers, and now Canada’s energy regulator is getting involved, which might delay the course.
After ConocoPhillips and Canadian Natural Resources became the newest firms to oppose Enbridge’s search for long-interval shipping commitments, the governor on Tuesday asked all involved to give their opinions. It’s asking for debates on whether the so-called open season ought to be delayed until the governor has approved the brand new system. Enbridge has claimed that it needs the commitments before it seeks permission.
The fight is the most recent outcome of a pipeline bottleneck that’s dogging the Canadian oil trade as producers await major initiatives like Keystone XL and the Trans Mountain enlargement to be constructed. With a shortage of options, producers concern a shift from the existing monthly sign-up system will give them less room to move.
Enbridge says that long-term deals, which might only apply to Canadian parts of the system, can be the best way to offset the needs of all carriers. The change could further lend a bonus to some of the largest refiners in the U.S. Midwest, such as BP and Exxon Mobil, who source crude oil on the Mainline, following Mike Walls, an analyst at Genscape.
Enbridge wants to reserve up to 90% of space on the Mainline to corporations with multiyear deals, charging them whether they export oil on the line or not.
The 2.8 MMbpd Mainline has seen massive rationing as growing production has run into nationwide pipeline bottlenecks. Enbridge aims to start sending limited volumes down the line in 2021.