CORRECTED-UPDATE 1-Enbridge applies to Canada regulator for Mainline oil shipping changes

(Corrects paragraph 4 to say that the regulator, not Enbridge, required a later open season)

Dec 19 (Reuters) - Enbridge Inc submitted on Thursday its application to the Canada Energy Regulator (CER) to contract out space on its Mainline oil pipeline, and said it had significant support from shippers, documents filed with the regulator showed.

Enbridge plans to allow shippers to book 90% of space under long-term contracts on the nearly 3 million barrel per day Mainline, Canada’s biggest oil pipeline system, rather than continue to ration space on a monthly basis.

The move comes as existing Canadian pipelines are congested, and the oil industry struggles to win regulatory or legal approval to expand them over environmental opposition.

Unlike when Enbridge made its first such proposal, the regulator is requiring that Enbridge delay open season - the period when it auctions off space - until after the CER approves of the terms, Enbridge’s executive vice president of liquids pipelines, Guy Jarvis, told reporters on a conference call.

“We believe the approach we’ve proposed is the gold standard to allowing all participants to participate,” Jarvis said.

The company filed letters of support from 12 shippers representing 70% of the current Mainline volume. They include Canadian producers Cenovus Energy Inc and Imperial Oil Ltd, but the list is made up mostly of U.S. refiners who buy Canadian crude such as BP Plc and PBF Energy .

In an unusual move, the CER halted Enbridge’s open season in September, after Canadian producers complained that Enbridge had too much market power and that U.S. refiners could book most of the Mainline’s space under the new system.

If approved, the new contract system would take effect once the existing framework expires in mid-2021. (Reporting by Rod Nickel in Winnipeg, Manitoba Editing by Sandra Maler and Matthew Lewis)


Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.