A major breakthrough has been achieved in the Canadian energy sector as Enbridge, a leading pipeline operator, has successfully negotiated a tolling agreement with oil shippers for its vast Mainline crude pipeline system. This landmark deal comes after the company’s initial proposal for long-term contracts was rejected by prominent oil producers, including Canadian Natural Resources, in 2021.
The newly minted agreement will govern tolls on both the US and Canadian segments of Enbridge’s Mainline crude pipeline system, which has the capacity to transport nearly three million barrels of oil daily to refineries in eastern Canada and the US Midwest from western Canada. This critical infrastructure plays a vital role in meeting the energy demands of North America and global markets.
Colin Gruending, President of Liquids Pipelines at Enbridge, expressed his satisfaction with the agreement, stating, “This settlement demonstrates our commitment to collaborative partnerships with shippers and industry groups, building on a 27-year history of similar incentive deals on the Mainline. It’s a triple win – our customers will continue to receive competitive and responsive service, Enbridge will earn attractive risk-adjusted returns, and the Mainline will maintain its position as a reliable source of safe, secure, and affordable energy.”
The agreement has received the necessary approvals from Enbridge’s Board of Directors and has garnered support from a 37-member industry group comprising producers, refiners, and integrated companies. This development comes on the heels of Enbridge’s recent acquisition of a large underground natural gas storage facility in British Columbia from FortisBC, valued at C$400m ($295.5m). Additionally, the company has agreed to divest an 11.57% interest in seven pipelines in the Athabasca region of northern Alberta to a group of 23 indigenous communities, in a deal worth C$1.12bn.
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