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OIL: TMX Pipeline Expansion Pushes Rivals to Cut Transit Fees

OIL
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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.
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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.