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Maine reports halt of crude shipments on Portland-Montreal line in January

Highlights

Maine's embattled Portland-Montreal Pipe Line stopped shipping crude after volumes fell sharply following the reversal of Enbridge's Line 9 line, state data showed Friday.

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There was no oil shipped on the line in January, the latest month for which data was available from the Maine Department of Environmental Protection. Pipeline company spokesman Jim Merrill declined to comment and had previously declined to discuss how the competing Line 9 would impact Portland-Montreal.

First opened in 1941, the Portland-Montreal Pipe Line, or PMPL, delivered light crudes from South Portland to Montreal. It averaged 60,800 b/d in 2015. However, volumes plummeted from 74,250 b/d in November to 19,435 b/d in December before drying up completely in January 2016. In January 2015, the pipeline averaged 104,500 b/d.

Cargoes into Portland have also ceased according to cFlow, Platts trade flow software. There were 30 cargoes into Portland in 2015, all crude oil. There have been none to date in 2016.



It's unclear why volumes stopped or if they will restart, but the cessation coincides with the Dec 3 announcement by Enbridge that the reversed Line 9 had entered service. The 300,000 b/d Line 9 carries light crudes from the Alberta oil sands to refineries in Quebec, the same area the PMPL had served.

There are two major refineries that take in crude from the reversed Line 9 -- Suncor's 137,000 b/d Montreal refinery and Valero's 265,000 b/d Jean-Gaulin refinery near Quebec City -- both of which have rail terminals and access to crude off of the Portland-Montreal pipeline. Both companies previously said that the Line 9 reversal would allow them to run a 100% North-American crude slate.

A Canadian crude trader Friday said Enbridge's Line 9 likely pressured the PMPL but that the market impact of its potential closure wouldn't be felt in Western Canada.

"With Line 9 operational that should take volume away from there, yes," the trader said. "I don't see that it will shift the market much here in Alberta. Too small."

For years, the Portland-Montreal pipeline had been unsuccessfully attempting to reverse the flow of the pipeline, which would have allowed it to carry crude from the Alberta oil sands and export it from Maine. The South Portland City Council in 2014 voted to ban the re-export of Canadian crude through its port when it approved zoning changes to prohibit the bulk loading of crude oil onto marine tank vessels within the city and the Port of Portland, the second-largest port on the US East Coast. Advocates of the pipeline have sued the city over the ordinance and the lawsuit is pending in US district court, according to Maine Public Radio.

Patricia Mohr, a vice president and commodity market specialist with Canadian banking giant Scotiabank, Friday discounted the possibility the Portland-Montreal pipeline could reverse and carry Canadian grades.

"I don't think there has been much consideration of the Portland pipeline," Mohr said at the Platts 5th Annual North American Crude Summit.

With the reversal of Line 9, Suncor can get its own crude from Alberta to fuel its Montreal refinery and that a new coker is being installed at the refinery to handle bitumen, she said.

--Allen Reed, allen.reed@platts.com
--Edited by Richard Rubin, richard.rubin@platts.com