Enbridge eyes changes to export volumes on Mainline network
The pipeline currently operates as a common carrier, with no set contracted volumes.
Customers are required to nominate the volume of crude they would like to ship on the line every month. If the total volume of nominations is more than the volume available, the pipeline operator apportions the nominations, reducing the amount of barrels each customer can export.
Enbridge has long complained that shippers routinely over-inflate the capacity they require, in order to guarantee sufficient space on the line.
Starting January 2020, Enbridge has asked the National Energy Board (NEB) for permission to begin take-or-pay agreements for 90% of the line's capacity. The company is reportedly planning to begin open-season early next year, asking producers to sign long-term deals on the export pipeline.
Take-or-pay agreement require the shipper to pay for a fixed volume of crude every month, regardless of whether that capacity is used. The practice is common for most pipelines in North America, particularly when deciding whether to make a final investment decision or fund an expansion. Unfortunately, this tends to favour larger companies with high production volumes, leaving smaller producers at a disadvantage.
Any changes to a pipeline's tolls and tariffs requires approval from the NEB.