February 7, 2019 / 7:10 PM / 10 months ago

TransCanada to cut spot rates on Keystone oil pipeline from Canada to Texas

NEW YORK (Reuters) - TransCanada Corp on Thursday filed with U.S. energy regulators to cut its spot rates to transport crude from Hardisty, Alberta, Canada to Port Arthur and Houston, Texas, just a month after filing to establish a new international tariff:

The company said it would now charge uncommitted shippers $8.28 a barrel to ship light crude and $9 to ship heavy crude from Hardisty to Port Arthur and Houston, according to a filing with the U.S. Federal Energy Regulatory Commission

In the initial January filing, Transcanada said it would charge uncommitted shippers $9.20 a barrel to ship light crude and $10 to ship heavy crude from Hardisty to Port Arthur and Houston

The new rates would be effective March 1, the filing said

Alberta curtailed 325,000 barrels per day (bpd) in January to drain a glut of crude in storage that was caused by congested pipelines, but has eased the curtailments modestly for February and March, citing faster-than-expected results as differentials narrowed rapidly from record lows

“I think this was pre-emptive,” one trader said, referring to the reduction in rates as a way for TransCanada to boost flows on Keystone. “WCS (Western Canadian Select) prices have weakened enough on its own, this wasn’t necessary.”

It’s unlikely flows have dropped off since committed shippers are allotted more space when there are fewer spot shipments, another trader said, adding that this is a way for Transcanada to incentivize spot shipments again.

The discount on Canadian heavy crude compared with U.S. light oil widened to $10.50 per barrel on Thursday morning from $9.40 earlier, according to Net Energy Exchange, after a part of Keystone and the Platte pipeline were shut to investigate a possible leak in the St. Louis, Missouri, area.

Reporting by Devika Krishna Kumar in New York; Editing by Dan Grebler

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