NEW YORK May 9 A Federal Energy Regulatory
Commission judge annulled committed shipper rates on the
Cushing-to-Texas Seaway pipeline on Friday, despite objections
from energy companies who say it could jeopardize billions in
Administrative law Judge Karen Johnson upheld a ruling she
made last September, saying the contracts that Seaway Crude Oil
Pipeline Company LLC negotiated with committed shippers must be
"disturbed" because of the "likelihood that overall rates would
be unjust and unreasonable."
The case arose from motions filed by oil companies against
uncommitted shipper rates on the 400,000 barrels-per-day
pipeline, which gives U.S. Gulf Coast refiners access to
Canadian heavy crude and American oil.
The federal regulator had struck the judge's initial
decision in March and remanded it to her review, saying her
arguments misconstrued long-held commission policy.
The commission honors so-called committed shipper rates,
which midstream companies enter with long-term shippers in order
to finance their costly projects. It reviews the
more expensive uncommitted rates on inter-state pipelines.
Enterprise Products Partners and Enbridge Inc.
, who share ownership of Seaway Crude Oil Pipeline
Company, reversed the pipeline in 2012. They charge uncommitted
shippers $3.82 per barrel for light crude and $4.32 for heavy
grades for space on the line, according to regulatory filings.
The two companies are expected to start service within the
next month on a twin pipeline that will double Seaway's capacity
to 850,000 bpd.
(Reporting by Selam Gebrekidan; Editing by Grant McCool)