CALGARY, April 2 /CNW/ - The National Energy Board (NEB) denied an
application today from Enbridge Pipelines Inc. (Enbridge) for the toll
principles as found in its Transportation Service Agreement and the resulting
tolls to be charged for transportation services on its only westbound Canadian
Enbridge's 849 km-long Line 9 pipeline, which began westbound service in
1999, can ship up to 38,160 cubic metres (240,000 barrels) of crude oil per
day from Montreal to Sarnia, Ont. The pipeline currently has two main
shippers, Imperial Oil Limited (Imperial) and NOVA Chemicals (Canada) Limited
(NOVA Chemicals), both long-term customers.
In its Reasons for Decision, the Board found that the Transportation
Service Agreement negotiated by Enbridge and Imperial without the full
participation of NOVA Chemicals, would have been highly beneficial to Imperial
while being unduly discriminatory to NOVA Chemicals.
The Board found that the applied-for toll design and the resulting
financial assurances are a negotiated solution between Enbridge and Imperial
that comes at an unreasonable cost to a third party, in this case, NOVA
Chemicals. Furthermore, there would likely be uncommitted volumes being
transported on Line 9 by NOVA Chemicals that would reduce Imperial's effective
transportation cost. For 2008, the net excess revenue paid by NOVA Chemicals
to the sole advantage of Imperial, is estimated at $18.5 million.
The Board also found that the discussions prior to the Open Season
conducted by Enbridge in 2007 for Line 9 should have included NOVA Chemicals.
The Board said that Enbridge's requirement for a shipper to either maintain an
investment grade credit rating or to provide certain financial assurances was
not clearly outlined in Enbridge's Notice of Open Season.
The Board also noted in its Reasons for Decision that had the parties
involved come to an agreement regarding financial assurances, the Board would
not have taken issue with the Transportation Service Agreement.
Celebrating 50 years of regulatory leadership, the NEB is an independent
federal agency that regulates several parts of Canada's energy industry. Its
purpose is to promote safety and security, environmental protection, and
efficient energy infrastructure and markets in the Canadian public interest,
within the mandate set by Parliament in the regulation of pipelines, energy
development and trade.
This news release and the Reasons for Decision are available on the
Board's Internet site at www.neb-one.gc.ca under What's New!
For further information:
For further information: Sarah Kiley, Communications Officer, Email:
firstname.lastname@example.org, Telephone: (403) 299-3633; For a copy of decision
RH-3-2008: National Energy Board, Publications, 444 Seventh Avenue SW,
Calgary, Alberta, T2P 0X8, Telephone (toll free): 1-800-899-1265, Telecopier
(toll free): 1-877-288-8803, E-mail: email@example.com