From a small start in July, a market test of Canadian demand for long-term oil pipeline delivery contracts expanded Friday across the largest network for cross-country and export flows, the Enbridge Mainline.
Calgary-based Enbridge Inc. is holding an open season through Oct. 2 to test support for long-term contracts of up to 20 years to replace traditional common-carrier monthly service for up to 90% of the Mainline’s capacity.
The new deal would go into effect after the current Enbridge pipeline toll settlement with shippers expires June 20, 2021. Of the Mainline’s forecast 3.25 million b/d capacity, only 325,000 b/d would be reserved for monthly spot service.
Enbridge began the test of oil industry demand for long-term contracts a month ago by launching an open season on subsidiary Express Pipeline, a 280,000 b/d cross-border line that would move oil 260 miles from Alberta to Wyoming.
Results of the long-contract sales would require approval by the National Energy Board (NEB). The Enbridge plan responds to capacity shortages and rationing that triggered debates over ways to improve pipeline access, predictability and reliability.
The planned departure from monthly oil delivery showed early signs of igniting thorough regulatory scrutiny and possibly industry conflict. Junior producers have already submitted warnings to the NEB that the switch is liable to favor big shippers capable of large financial and oil volume commitments.
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