Oil producer BP Plc complained to Canada’s National Energy Board (NEB) regulator about Enbridge Inc’s implementation and then abrupt reversal of new rules for shipping crude on its Mainline pipeline system, NEB documents showed on Thursday.
According to Reuters, Enbridge notified shippers late last month that it would introduce a supply verification procedure to determine each company’s volumes on the Mainline, but then scrapped the policy early this week.
The NEB said in a letter on Thursday to BP and Enbridge that it would establish a process to hear comments from both companies and anyone else this month.
Enbridge’s initial notice of the change caused the discount on Canadian heavy crude against the North American benchmark West Texas Intermediate to widen sharply in sparse trade as shippers worried about transport constrictions. The discount then narrowed rapidly on Monday when Enbridge reversed course.
“Unnecessarily injecting uncertainty in how services would be provided to shippers .. is shocking and egregious,” said Jennifer Geggie, vice-president of global oil Americas at BP Products North America, a subsidiary of BP, in a June 6 letter to the NEB.
Geggie further noted the reversal was announced during the main trading window for July 2018 shipments and changing pipeline procedure at that point “could cause unintended consequences which could materially harm shippers.”
BP also said there was a lack of clarity on whether or not the new supply verification procedures would apply after July, creating further uncertainty for shippers.
Enbridge declined Reuter’s request to comment on BP’s complaint and said it would file its response with the NEB “in due course.”
Enbridge has long sought more efficient ways to move oil on the network and prevent shippers from overestimating the product they have to move as they compete for space.
(Reuters)
