National Energy Board denies application for Priority Destination designation
CALGARY, July 11, 2013 /CNW/ - In a decision issued today, the National Energy
Board (NEB or the Board) announced its decision to deny Chevron Canada Limited
(Chevron)'s application to designate its Burnaby Refinery a Priority
On 19 June 2012, Chevron applied to the Board for an order designating
Chevron's Burnaby Refinery a priority destination pursuant to section 1.58 of
the Tariff of Trans Mountain Pipeline ULC (the Tariff).
Under section 1.58 of the Tariff, "priority destination" means a refinery,
marketing terminal or other facility connected to and capable of receiving
petroleum from the Trans Mountain Pipeline system (the Pipeline), and so
designated by the Board by reason that it is not capable of being supplied
economically from alternative sources.
This is the first time the NEB has had to consider an application for Priority
Destination Designation (PDD). As part of this hearing process, the Board
considered the role of PDD as well as the criteria in order to qualify.
The Board determined that PDD may be granted if a refinery:
i. is unable to meet, or is at substantial risk of not meeting,
its minimum run rate; and
ii. cannot reasonably ensure its long-term viability.
Based on the evidence provided, the Board found that Chevron's Burnaby
Refinery did not satisfy the criteria for PDD and therefore should not be
designated a Priority Destination. Among other reasons, the Board observed
that Chevron had consistently met its 40,000 bpd minimum run rate using the
existing options in its supply portfolio. The Board was of the view that it is
the responsibility of Chevron to design a portfolio of supply options that
will best mitigate its supply risk and ensure the long-term viability of the
During the hearing, the Board also considered submissions from parties about
the potential implications of PDD on Chevron, pipeline shippers, workers at
the Burnaby Refinery, the local economy and refined product markets.
Furthermore, the Board noted that nomination and capacity allocation
procedures are likely contributing to apportionment on the Pipeline. As a
result, the Board directed Trans Mountain to submit revised nomination or
capacity allocation procedures to address the current apportionment issue or
an explanation of why the procedures in place at that time are adequate, for
Board approval on or before 30 September 2013.
The National Energy Board is an independent federal regulator of several parts
of Canada's energy industry with the safety of Canadians and protection of the
environment as its top priority. Its purpose is to regulate pipelines, energy
development and trade in the Canadian public interest.
This news release and the Reasons for Decision are available on the NEB's
Internet site at www.neb-one.gc.ca under What's New!
Tara O'Donovan Communications Officer E-mail:Tara.ODonovan@neb-one.gc.ca
Telephone: 403-299-3633 Telephone (toll free): 1-800-899-1265 Facsimile:
403-292-5503 Facsimile (toll free): 1-877-288-8803 TTY (teletype):
For a copy of theReasons for Decision: National Energy Board Library
Ground Floor 444Seventh Avenue SW Calgary, Alberta T2P0X8 Telephone:
403-299-3561 Telephone (toll free): 1-800-899-1265 Facsimile: 403-292-5576
Facsimile (tollfree): 1-877-288-8803 Email:email@example.com
SOURCE: National Energy Board
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CO: Government of Canada
-0- Jul/11/2013 20:39 GMT
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