Regulator rejects Enbridge's Mainline pipeline system contracting proposal

Photo: The Canadian Press

The Enbridge logo is shown at the company's annual meeting in Calgary on May 9, 2018. THE CANADIAN PRESS/Jeff McIntosh

Canada's main energy regulator has rejected Enbridge Inc.'s proposal to fill its Mainline pipeline network through long-term contracts.

The Calgary-based pipeline giant had applied to enter into long-term contracts for 90 per cent of the Mainline system's capacity.

The pipeline's demand has exceeded capacity over the past few years. Enbridge had argued firm contracts would give customers more predictable access to the pipeline.

But some Canadian oil producers argued the proposed change would worsen the existing capacity constraints and could lead to lower oil prices.

The Canada Energy Regulator says it concluded Enbridge's proposal would dramatically change access to the pipeline. It said certain companies would benefit from long-term stability, but others would lose access to the pipeline.

Enbridge's Mainline is Canada's largest oil pipeline system, moving over three million barrels per day of petroleum products to market. The pipeline provides approximately 70 per cent of the total oil pipeline transportation capacity out of Western Canada.