A Canadian trade group has filed a protest against Enbridge Inc.’s proposal to convert its Mainline system to serve a limited number of customers.
“If approved, it will reduce market optionality for Canadian producers, transfer pricing power to downstream buyers, depress prices for upstream producers and impair the viability of future investment,” Explorers and Producers Association of Canada warned in its filing with the Canada Energy Regulator (CER).
The proposal has created a conflict between U.S. refiners that stand to gain from the conversion and Canadian producers, Natural Gas Intelligence reported. Mainline’s capacity is 3 million barrels of oil a day.
Enbridge filed its proposal with CER in December 2019. It would allow shippers on the 70-year-old pipeline system to contract for priority access on 90% of capacity with the company reserving 10% for shipments of spot or uncommitted volumes of crude. The tolling agreement now in place is set to expire on June 30, 2021.
Enbridge indicated in its filing that the new agreement would not go into effect until the Line 3 Replacement Project goes into service. The project recently received its final permit approval from a Minnesota agency.
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