NEB orders tests on Line 9B before start-up

CALGARY • In what it said was an “unusual” step, the National Energy Board has put the brakes on Enbridge Inc.’ s Line 9B oil pipeline between southern Ontario and Quebec for a second time.

In a release Thursday the NEB said that Enbridge must conduct hydrostatic testing along three densely populated segments — near Hilton, Ont.; Kingston and Brockville, Ont., and Mirabel, Que. — before the Calgary-based company can begin shipping crude oil down the pipe. In total, the NEB imposed eight new conditions on the pipeline on Thursday.

NEB vice-chair Lyne Mercier said the NEB’s additional conditions were unusual, but not unprecedented, in a case in which a company was applying to reverse the flow through an existing pipeline.

In what it also called an unusual move, the regulator also met with Quebec-based refining executives over the line’s ongoing delays.

Mercier confirmed regulators met with Valero Energy Corp. executives after the firm expressed concerns about the delays over Line 9B, originally expected to begin shipping oil from Sarnia, Ont. to Quebec in November.

“We don’t get involved with end users and customers, but this is quite unusual and (Valero) were curious to see what was going on,” Mercier said in an interview. “We told them that the ball is in Enbridge’s court and that they should be communicating with Enbridge.”

In October, the federal regulator delayed the pipeline’s in-service when it said the company had not installed shut-off valves on both sides of water crossings.

Enbridge spokesperson Graham White said in an email that all necessary valves are in place and the company is reviewing the eight new conditions imposed Thursday.

“We are confident that Line 9 can be operated safely and we will fulfil the regulator’s conditions,” he said.

Executives at Suncor Energy Inc. and Valero expressed frustration last week about the delays, even before learning the pipeline will undergo further testing before it begins shipping crude to their Quebec refineries.

In a letter to the NEB on June 8, Valero’s president of Canadian operations Ross Bayus said the company and its joint-venture partner had invested $300 million in its Quebec refinery and facilities “in anticipation of receiving deliveries via Line 9.”

Bayus said that Valero reverted to buying crude from international markets to feed its refinery and asked to meet NEB chair Peter Watson in person. The company did not respond to a request for comment Thursday.

Suncor’s executive vicepresident of refining and marketing Kris Smith said in a June 10 letter to the NEB that the delays on Line 9B resulted in a “high cost and negative economic impacts to our business, and by extension to those communities and provinces in which we operate, as the time for a decision is ongoing.”

Suncor spokesperson Sneh Seetal said the company supports the NEB’s work to ensure the pipeline operates safely.

The original Line 9 has been in the ground for around four decades, but Enbridge has reconfigured it to ship greater volumes and flow crude eastward rather than westward. That way, Quebec refineries can have access to domestic crude, rather than having to rely on imports.