NEW YORK, May 11 (Reuters) - The U.S. Federal Energy Regulatory Commission said on Friday it had temporarily accepted the tariffs that the Seaway oil pipeline has proposed to charge its shippers, helping clear the way for the line’s full service.
The FERC said the tariffs were “accepted and suspended” effective as of May 14, and were “subject to refund and conditions”. Seaway had proposed an initial dollar per barrel rate of $3.82 for light crude and $4.32 for heavy crude for uncommitted shippers.
FERC also called for a hearing to address the issues related to the rates application to be held within 20 days.
The tariff debate over Seaway, which operator Enterprise Products said was scheduled to start flowing from Cushing to the Gulf Coast on May 17, has drawn scrutiny because some oil firms objected to its application to charge so-called “market rates”, arguing that its near-monopoly power would inflate rates.
On Monday, FERC, which regulates interstate pipelines, denied the application to set market-based rates. Two-thirds of the pipeline’s capacity is already committed, so the spot rates would have applied to “walk up” users, Enterprise has said.
The pipeline, which has been reversed to flow from Cushing, Oklahoma, to the Gulf Coast due to a glut of inland crude, will initially have a capacity of 150,000 barrels per day (bpd), rising to 400,000 bpd after expansion work.