Summary
Enbridge Inc. announced a significant development regarding its Mainline Tolling Settlement (MTS), which has received approval from the Canada Energy Regulator and is effective through December 31, 2028. This settlement governs the tariffs for crude oil and liquids shipments originating in Western Canada and destined for delivery across North America. The approval is a crucial step in providing long-term rate certainty for a key segment of Enbridge's business. The MTS includes provisions for an international joint tariff for heavy crude oil movements, toll escalations tied to relevant cost indices, and a dual currency system. Importantly, it incorporates a financial performance collar designed to incentivize Enbridge for operational efficiency and cost management while also offering downside protection against unforeseen market or operational disruptions. This agreement provides a stable framework for Enbridge's Mainline operations and is retroactively effective from July 1, 2021.
Key Highlights
- 1Canada Energy Regulator approves Enbridge's Mainline Tolling Settlement (MTS) through December 31, 2028.
- 2MTS establishes tariffs for crude oil and liquids shipments from Western Canada across North America.
- 3Agreement includes an international joint tariff (IJT) for heavy crude oil from Hardisty to Chicago.
- 4Tolls will escalate based on U.S. consumer price and power indices for operation, administration, and power costs.
- 5Tolls remain distance and commodity adjusted, utilizing a dual currency IJT.
- 6Financial performance collar implemented to incentivize throughput/cost optimization and provide downside protection.