OIL: TMX Pipeline Expansion Pushes Rivals to Cut Transit Fees

Pipeline that traditionally carry Canadian crude to the US are cutting rates and looking to ship different grades of crude oil due to rising competition from the expanded 890k b/d Trans Mountain Pipeline, Reuters said.

• The move will cut crude transport costs to the Midwest and USGC.
• Enbridge will cut September tariffs by 11% on its 3m b/d mainline system. The company is also not rationing capacity for the first time in a year.
• Enbridge’s 190k b/d Spearhead and 720k b/d Flanagan South pipelines that deliver crude from the Mainline to Cushing could lose volumes, analysts told Reuters.
• The 950k b/d Seaway - moving oil from Cushing to the USGC - could also see lower capacity.
• This impact is expected to be short-lived as the increased capacity is met with rising Canadian crude production, likely to rise by 0.5m b/d by 2025 from 2023 levels.