Enbridge Cuts Rates to Compete with New Trans Mountain Oil Route
(P&GJ) — According to the Financial Post, Enbridge Inc. has reduced tolls on its Canadian oil export pipelines in response to heightened competition from a newly operational pipeline linking Alberta to Vancouver.
The toll for transporting heavy crude from Hardisty, Alberta, to Texas has been lowered to $9.4877 per barrel from the previous rate of $10.7006 per barrel, according to the Financial Post.
This adjustment comes after the launch of the expanded Trans Mountain pipeline system, known as TMX, which can now transport up to 890,000 barrels of oil per day to the British Columbia coast. From there, the oil is primarily shipped to markets on the U.S. West Coast and in Asia.
For years, Canadian oil producers faced a shortage of export capacity, but the TMX expansion has now provided ample pipeline options. As a result, companies can choose to route oil through TMX rather than relying on Enbridge’s network.
This shift has led to a significant drop in apportionment—a system of rationing pipeline space—on Enbridge’s Mainline system, which runs from Alberta to the U.S. Midwest. Apportionment has decreased from over 20% in March to zero for September, following the commencement of TMX in May.
Enbridge CEO Greg Ebel told the Financial Post that the lack of apportionment is typical for this season. He also mentioned that the company anticipates transporting around three million barrels of oil per day throughout the year. Ebel highlighted that Enbridge’s pipelines connect to 75% of U.S. refineries, offering broader market access compared to the TMX, which primarily serves a single market.
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