March 31, 2010 / 6:26 PM / 10 years ago

UPDATE 3-U.S. regulator sides with Enbridge in Clipper row

* Suncor, Imperial lose bid to revise toll deal in US

* FERC rejects argument of change in market conditions

* Canadian regulator defers decision

(Adds NEB decision, Suncor comments. In U.S. dollars)

By Jeffrey Jones

CALGARY, Alberta, March 31 (Reuters) - Shippers on Enbridge Inc’s (ENB.TO) Canada-U.S. oil pipeline system lost a bid on Wednesday to force Enbridge to scrap a tolling deal for a new line on the grounds the recession led to lower crude output than expected.

The U.S. Federal Energy Regulatory Commission rejected a petition from Suncor Energy Inc (SU.TO), Imperial Oil Ltd (IMO.TO) and other shippers to get Enbridge to revise the agreed tariffs associated with the $3.3 billion Alberta Clipper pipeline, which are due to take effect on Thursday.

However, Canada’s National Energy Board appeared to leave the door open for some relief for the oil producers, which argue the pipeline is not currently needed.

For its part, FERC said it will not step in and “undo a settlement because certain parties now argue that the deal turned out differently than they thought”.

The newly completed Alberta Clipper pipeline to Superior, Wisconsin, from Alberta has a capacity of 450,000 barrels a day. Tolls to cover the cost would be applied to all customers on Enbridge’s massive pipeline system to the U.S. Midwest.

“We are pleased that the FERC agrees with our position and to be able to begin collecting tolls as of tomorrow,” Enbridge spokesman Glenn Herchak said. “We believe that this further supports the common carrier and settlements system, which we believe benefits the producing community as a whole.”

Oil producers argued the new line was unnecessary because a host of oil sands projects were delayed or canceled while it was built during the recession, cutting production forecasts.

They made a similar petition to Canada’s National Energy Board, which said on Wednesday it will may rule on the usefulness of the Alberta Clipper project at a later date.

But in a letter to Enbridge, NEB said it denied the pipeline’s request for interim tolls based on numbers provided when it applied to build the line. Officials from all sides said they needed to study the ruling to determine the impact.

“Regardless, we’re pleased that the NEB has listened to the arguments and concerns put forward by a number of companies regarding Enbridge’s tolling application,” Suncor spokeswoman Sneh Seetal said. “We still stand by our position, that given the dramatic changes in market and economic conditions, that the Alberta Clipper project is not needed at this time.”

The addition of Alberta Clipper’s capacity would boost tolls for Canadian companies moving heavy oil to the Midwest by about 78 cents a barrel, to $3.80 a barrel, when combined with another 20 cent increase requested by Enbridge.

FERC approved the tolling structure between Enbridge and the Canadian Association of Petroleum Producers in 2004 and updated one to include Alberta Clipper costs in 2008.

“The protesters’ speculative arguments concerning the benefits of the project are not sufficient to abrogate the settlement or find that the proposed rates are unjust and unreasonable,” FERC said in its decision. (Editing by Peter Galloway and Rob Wilson; editing by Andre Grenon)

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