Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

UPDATE 2-BP complains to Canada regulator about Enbridge oil pipeline actions

Published 2018-06-07, 07:14 p/m
© Reuters.  UPDATE 2-BP complains to Canada regulator about Enbridge oil pipeline actions
BP
-
CL
-
ENB
-

By Rod Nickel and Julie Gordon

June 7 (Reuters) - Oil producer BP Plc BP.L complained to Canada's National Energy Board (NEB) regulator about Enbridge Inc's ENB.TO implementation and then abrupt reversal of new rules for shipping crude on its Mainline pipeline system, NEB documents showed on Thursday.

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 2018, creating further uncertainty for shippers.

Enbridge declined to comment on BP's complaint and said it would file its response with the NEB "in due course."

The Mainline is part of the largest crude oil transportation network in Canada, funnelling oil from Alberta to U.S. refineries. 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.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.