Oil producer complaints won’t alter Mainline pipeline open season plan: Enbridge

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CALGARY, A.B. – A senior executive with Enbridge Inc. says the company won’t change course on its plan to convert most of its Mainline pipeline system to long-term contracts despite growing opposition from major Canadian oil producers.

Canadian Natural Resources Ltd. is the latest producer to file a letter of complaint with the National Energy Board about Enbridge’s open season to collect binding contracts for transport, joining Suncor Energy Inc., Shell Canada and MEG Energy Corp., along with the Explorers and Producers Association of Canada.

Guy Jarvis, senior vice-president of liquids pipelines for Enbridge, says the complaints were expected after 18 months of consultations with customers, but the company will continue with its two-month open season launched on Aug. 2.

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The complainants want the NEB to shut down or delay the open season, suggesting it’s unfair to demand binding contracts for space on the pipeline system responsible for 70 percent of Canada’s oil transportation when the few alternative pipelines are nearly fully contracted.

Only 10 percent of Mainline capacity is to be reserved for uncommitted volumes, down from 100 percent available to shippers now under a tolling agreement that is set to expire on June 30, 2021.

In a submission to the NEB dated Monday, Canadian Natural says it uses the Mainline for the “vast majority” of its oil shipping and demands the NEB intervene to “prevent the exercise of monopoly power.”

“We’ve made the determination that, in our view, what we’re offering is the best compromise that can be achieved amongst all those players,” said Jarvis in an interview.

“The other thing to point out is there have been, I don’t know, three or four complaints here, but we’ve been dealing with in excess of 40 different shippers negotiating this package so it’s still a relatively small number, a small subset.”

In an email on Monday, an NEB spokeswoman said the regulator is reviewing the producers’ complaints but has not decided on its next steps.

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