The National Energy Board (NEB) should dismiss a complaint from Crescent Point Resources Partnership against TEML Westspur Pipelines regarding changes in operational practices on two Saskatchewan affiliate pipelines, says Westspur.
Crescent Point “has not established any basis for the requested relief,” the carrier said in a letter to the NEB.
Crescent Point’s complaint followed changes that TEML made to the way crude equalization is carried out on the Weyburn and Saskatchewan Pipelines.
The equalization process exists because, as the Canadian Association of Petroleum Producers explains:
“The Canadian crude oil pipeline shipment system does not have the ability to completely separate the various crude oils or condensates that it ships through pipelines.
"The quality of the crude oil or condensate that enters the pipeline system may be significantly different from the quality when it exits the system. The oil and natural gas industry uses accepted equalization procedures to make up for these quality differences.”
Crescent Point asserts that the equalization methodology used on the gathering systems has to be the same as that on the interconnecting mainline transportation system, carried out in “a fair and equitable manner.”
TEML acquired the Saskatchewan Gathering System from Enbridge Energy Partners LP in December 2016.
As part of the deal, it also acquired outstanding shares of Westspur, an NEB-regulated interprovincial trunk line that transports crude oil from the Saskatchewan Gathering System to the Enbridge Mainline at Cromer, Manitoba.
Crescent Point said that the Westspur trunk line functions with the Saskatchewan Gathering System “as an operationally integrated crude oil transportation system,” which the carrier says is a “mischaracterization” of the operation of these pipelines.
“The fact that the two now have different equalization methodologies reflects the fact that this provincially regulated gathering system is functionally separate from the Westspur System,” the company says.
Westspur also says there is no basis for the NEB to exercise any jurisdiction over the Saskatchewan Gathering System as it is provincially regulated.
“The simple fact that Westspur may be affiliated with the provincially regulated pipeline companies does not make the NEB responsible for resolving disputes that arise on these provincially regulated pipeline systems,” the company says.
“Absent a finding of NEB jurisdiction over the Saskatchewan Gathering System, that has no basis in fact, the board cannot make the requested orders forcing the reversal of changes that have been made to the equalization methodology applied to these systems.”
Only the Saskatchewan government has that jurisdiction and the issue of whether there is any need or basis for exercising its authority to effect any changes on these provincially regulated systems is currently before the Saskatchewan ministry of the economy, says Westspur.
The ministry, it added, is currently attempting to resolve the concerns that Crescent Point and other producers have raised with it concerning the operation of the Saskatchewan Gathering System.
Westspur said it has carried out the process relating to the equalization of crude quality differences in a fair and equitable manner and in full compliance. It does not agree with Crescent Point that the equalization methodology used on the gathering systems has to be the same as that on the interconnecting mainline transportation system.
“To the contrary, it is not common for provincially regulated gathering systems to employ the Quality Equalization Steering Committee procedures.”