Enbridge Says Mainline Opponents are Stalling for Time
(Bloomberg) -- Enbridge Inc. said opponents of its plan to convert the Mainline oil pipeline network to a contract system may be stalling for time, hoping to see what happens on other lines that are in the works before making long-term commitments on its system.
Opponents of Enbridge’s proposal, including Canadian Natural Resources Ltd. and the Explorers & Producers Association of Canada, have asked that the Canada Energy Regulator split the approval process for the plan into two. The first part would address whether the conversion should even be allowed.
That scenario would be unique, and would likely make the entire regulatory process longer, said Vern Yu, the head of Enbridge’s liquids pipelines business. Pipeline projects including the Trans Mountain expansion, TC Energy Corp.’s Keystone XL and Enbridge’s Line 3 expansion face key obstacles this year that could affect their timelines or even their ultimate fate.
“It might be strategic from some of these shippers because it would help them gain more clarity on what’s happening on some of the other pipelines that are under development,” Yu said in an interview. “It would be a way for them to gain an advantage as they make decisions going forward.”
Yu reiterated that Enbridge’s plan to lock shippers on the Mainline into contracts of as long as 20 years -- a change from the current system, in which space is allocated on a monthly basis -- has the support of customers accounting for more than 70% of the volume on the system. The plan will provide shippers with certainty on tolls and market access.
Oil-sands producer Cenovus Energy Inc. and LyondellBasell Industries NV, which owns a Houston refinery that receives crude from the Mainline, were among companies noting their support of the change in filings on Thursday.
The Mainline is Canada’s largest oil pipeline network, with the capacity to ship about 2.85 million barrels a day.
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