June 13, 2018
Canada’s biggest pipeline operator, Enbridge Inc, announced it was taking steps to address complaints from oil shipper BP PLC about changes it made in allocating space on its Mainline system.
According to Reuters, the company announced the policy change late last month before abruptly reversing it last week, after it caused panic among shippers and dramatically increased a discount on Canadian heavy crude.
Enbridge had intended to change how it verifies shippers’ oil supplies before dividing up capacity on the Mainline to prevent shippers from overestimating how much crude they had to move, a problem known as “air barrels.”
In a letter to Canadian regulator the National Energy Board (NEB), Enbridge said it would not use the revised system in August, and had no plans to do so thereafter.
The company also told Reuters, in response to BP’s concerns, that it would not implement any further changes during the trading period – the first three weeks of the month prior to shipment when sales and scheduling decisions are made. Enbridge said it would give shippers at least one calendar month’s notice of future changes.
Enbridge said in light of its actions, there should be no need for the NEB to continue a process of receiving industry feedback on the situation.