Canadian regulator approves friction reducer cost allocation methodology for Keystone

The Canada Energy Regulator has approved, with modifications, the cost allocation methodology for friction reducers on the Keystone Canada pipeline system. South Bow GP (Canada) Ltd. will need to recalculate the tolls for 2020 and 2021 before final validation.

Share:

Gain full professional access to energynews.pro from 4.90$/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90$/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 $/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99$/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 $/year from the second year.

The Canada Energy Regulator (CER) has validated a revised methodology for allocating the costs of drag reducing agents (DRA) as part of the tolls applied on the Keystone Canada pipeline system. The methodology, submitted by South Bow GP (Canada) Ltd., was deemed compliant with regulatory requirements, subject to modifications. The company will need to reassess the tolls for 2020 and 2021 before final approval.

Methodology review

South Bow had submitted a cost allocation plan for DRAs in response to a previous Commission decision. That ruling determined that only certain DRA-related costs could be charged to shippers, requiring a specific allocation method to ensure distribution aligned with the actual use of the pipeline.

Challenges and proceedings

Several shippers, including Phillips 66 Canada Ltd. and Cenovus Energy Inc., raised concerns about the proposed method. As a result, the Commission initiated a process that included both written and oral proceedings. Cross-examinations were conducted before the final arguments were presented, allowing for a thorough review of the positions of the various parties.

Decision and implementation

Following analysis, the Commission determined that South Bow’s proposed allocation method was more consistent with transportation agreements and regulatory conclusions than the alternatives suggested by opposing shippers. However, it mandated a modification before implementation and required the company to recalculate tolls based on this revised approach.

Regulatory framework considerations

The Keystone Canada pipeline system includes 1,233 kilometres of conduits and associated infrastructure. Under Canadian regulations, tolls applied to shippers must be fair, reasonable, and non-discriminatory. These fees cover the operating and maintenance costs of infrastructure while allowing operators to recover their investments and generate financial returns.

Pipeline companies must provide shippers with sufficient information to assess the relevance of tolls. In case of disputes, the regulator has a procedural framework to review and, if necessary, adjust the pricing methodologies in force.

Coal India issues tenders to develop 5 GW of renewable capacity, split between solar and wind, as part of its long-term energy strategy.
US utilities anticipate a rapid increase in high-intensity loads, targeting 147 GW of new capacity by 2035, with a strategic shift toward deregulated markets.
France opens a national consultation on RTE’s plan to invest €100 billion by 2040 to modernise the high-voltage electricity transmission grid.
Governor Gavin Newsom orders state agencies to fast-track clean energy projects to capture Inflation Reduction Act credits before deadlines expire.
Germany’s energy transition could cost up to €5.4tn ($6.3tn) by 2049, according to the main industry organisation, raising concerns over national competitiveness.
Facing blackouts imposed by the authorities, small businesses in Iran record mounting losses amid drought, fuel shortages and pressure on the national power grid.
Russian group T Plus plans to stabilise its electricity output at 57.6 TWh in 2025, despite a decline recorded in the first half of the year, according to Chief Executive Officer Pavel Snikkars.
In France, the Commission de régulation de l’énergie issues a clarification on ten statements shared over the summer, correcting several figures regarding tariffs, production and investments in the electricity sector.
A group of 85 researchers challenges the scientific validity of the climate report released by the US Department of Energy, citing partial methods and the absence of independent peer review.
Five energy infrastructure projects have been added to the list of cross-border renewable projects, making them eligible for financial support under the CEF Energy programme.
The Tanzanian government launches a national consultation to accelerate the rollout of compressed natural gas, mobilising public and private financing to secure energy supply and lower fuel costs.
The Kuwaiti government has invited three international consortia to submit bids for the first phase of the Al Khairan project, combining power generation and desalination.
Nigeria’s state-owned oil company abandons plans to sell the Port Harcourt refinery and confirms a maintenance programme despite high operating costs.
The publication of the Multiannual Energy Programme decree, awaited for two years, is compromised by internal political tensions, jeopardising strategic investments in nuclear and renewables.
The US Energy Information Administration reschedules or cancels several publications, affecting the availability of critical data for oil, gas and renewables markets.
Brazilian authorities have launched a large-scale operation targeting a money laundering system linked to the fuel sector, involving investment funds, fintechs, and more than 1,000 service stations across the country.
A national study by the Davies Group reveals widespread American support for the simultaneous development of both renewable and fossil energy sources, with strong approval for natural gas and solar energy.
The South Korean government compels ten petrochemical groups to cut up to 3.7 million tons of naphtha cracking per year, tying financial and tax support to swift and documented restructuring measures.
The U.S. Department of Energy has extended until November the emergency measures aimed at ensuring the stability of Puerto Rico’s power grid against overload risks and recurring outages.
Under threat of increased U.S. tariffs, New Delhi is accelerating its energy independence strategy to reduce reliance on imports, particularly Russian oil.

Log in to read this article

You'll also have access to a selection of our best content.