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Chevron denied refinery status
Chevron Canada lost a battle of refineries in its bid to have its Burnaby facility in Port Metro Vancouver declared a “priority destination” for crude shipped on Kinder Morgan’s Trans Mountain pipeline from Alberta.
The company filed the application with Canada’s National Energy Board 15 months ago, claiming it was unable to access enough crude for the 55,000 barrels per day facility.
The bid was opposed by BP Canada, Tesoro Canada, Phillips 66 Canada and Shell Trading Canada, which have refineries with combined capacity of 590,900 bpd in the Puget Sound area of Washington State and which also access Canadian crude on the Trans Mountain pipelines.
They said that if Chevron gained the designation less crude would be available off Trans Mountain for their refineries, putting them at a competitive disadvantage.
Imperial Oil, which operates a refinery in the Edmonton area, also opposed the application.
If the board had approved the request, Chevron would have been able to receive all 57,000 bpd of the crude it could process without being subject to apportionment on Trans Mountain.
Refineries curtailed Currently, all five refineries connected to the pipeline system are curtailed on a pro rata basis when nominations exceed the pipeline’s capacity.
The NEB said that for Chevron to be rated a priority destination it would have had to prove it was unable to meet, or was at substantial risk of not meeting, its minimum run rate and could not reasonably ensure its long-term viability.
The regulator said, in fact, that Chevron had consistently met its minimum 40,000 bpd rate and concluded that it was up to Chevron to make sure it had enough supply options to remain afloat.
The NEB also said Kinder Morgan has until the end of September to either change its procedures for allocating pipeline space or explain why they are adequate.
Kinder Morgan is also working on plans to expand its Trans Mountain system to 890,000 bpd from 300,000 bpd.
—Gary Park
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