Canada regulator to make preliminary decision on Trans Mountain expansion tolls (updated)

Canada Energy Partners

12/10/2023 23:33

(Adds details on tolling dispute, CER hearing)
    By Ismail Shakil and Nia Williams
       OTTAWA, Oct 12 (Reuters) - The Canada Energy Regulator
(CER) said on Thursday it will make a preliminary decision on
Trans Mountain Corp's proposed shipping tolls for its oil
pipeline expansion project this autumn, before holding a hearing
on the tolls next year.
    The timing of the decision aims to ensure interim tolls are
in place when the pipeline expansion becomes operational, the
regulator said in a statement.
    The 590,000 barrel-per-day Trans Mountain expansion project
(TMEP) will nearly triple the flow of oil from the province of
Alberta to Canada's Pacific Coast and is expected to start
operating late in the first quarter of 2024.
    But shippers including Canadian Natural Resources  CNQ.TO 
and Cenovus Energy  CVE.TO  are disputing the interim tolls
proposed by Trans Mountain, arguing a portion of the base toll
is too high.
    Long-term shipping contracts cover 80% of the expansion
project's capacity. The final tolls will impact the value of the
pipeline when the Canadian government, which bought it in 2018
to ensure the expansion got built, puts it up for sale.
    The CER said the hearing next year would look at issues
including the "fairness and reasonableness" of existing tolling
agreements with shippers and potential repercussions on Trans
Mountain's financial standing.
    "After service begins on the TMEP and final costs are known,
Trans Mountain can request approval from the Commission of the
CER for final tolls," the regulator said.

 (Reporting by Nia Williams and Ismail Shakil; Editing by Leslie
Adler and Bill Berkrot)
 ((ismail.shakil@tr.com;))