(Adds details of application, executive's comments)
By Rod Nickel
Dec 19 (Reuters) - Enbridge Inc submitted on
Thursday its application to the Canada Energy Regulator (CER) to
contract out space on its Mainline oil pipeline, and said it had
significant support from shippers, documents filed with the
regulator showed.
Enbridge plans to allow shippers to book 90% of space under
long-term contracts on the nearly 3 million barrel per day
Mainline, Canada's biggest oil pipeline system, rather than
continue to ration space on a monthly basis.
The move comes as existing Canadian pipelines are congested,
and the oil industry struggles to win regulatory or legal
approval to expand them over environmental opposition.
The main change Enbridge made to an earlier proposal that
drew sharp criticism from Canadian oil producers was to delay
open season - the period when it auctions off space - until
after the CER approves its change, Enbridge's executive vice
president of liquids pipelines, Guy Jarvis, told reporters on a
conference call.
"We believe the approach we’ve proposed is the gold standard
to allowing all participants to participate," Jarvis said.
The company filed letters of support from 12 shippers
representing 70% of the current Mainline volume. They include
Canadian producers Cenovus Energy Inc and Imperial Oil
Ltd, but the list is made up mostly of U.S. refiners
who buy Canadian crude such as BP Plc and PBF Energy
.
In an unusual move, the CER halted Enbridge's open season in
September, after Canadian producers complained that Enbridge had
too much market power and that U.S. refiners could book most of
the Mainline's space under the new system.
If approved, the new contract system would take effect once
the existing framework expires in mid-2021.
(Reporting by Rod Nickel in Winnipeg, Manitoba
Editing by Sandra Maler and Matthew Lewis)
BP (BP.)
