Shares in Enbridge Inc. fell by about two per cent Monday morning after the Canada Energy Regulator ordered it to suspend an open season it was holding for service on its Canadian Mainline oil pipeline system.
Enbridge says the CER decision announced Friday after markets closed changes the timing but it still intends to proceed with signing firm contracts with shippers on the system that moves about 70 per cent of Canada's crude exports into the United States.
The pipeline system's current operating model, which makes space open to all bidders on a monthly basis, expires in June 2021.
The regulator says it shut down the open season after reviewing submissions from more than 30 parties, including complaints from producers Canadian Natural Resources Ltd., Suncor Energy Inc. and Shell Canada Ltd. that the process was unfair.
Analysts rate the CER decision as slightly negative for Enbridge because it means the Calgary-based company must now apply to the CER to approve the tolls, terms and conditions of the proposed service change before another open season can proceed.
In a report, analysts at Tudor Pickering Holt & Co. say that could mean it will have to settle for lower tolls than it expected.
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September 30, 2019 at 11:55PM
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