Alberta Expects $1.7 Billion Profit From Crude-by-Rail

Alberta Expects $1.7 Billion Profit From Crude-by-Rail

Alberta Expects $1.7 Billion Profit From Crude-by-Rail

Investing in rail is a medium-term stop-gap as pipeline projects such as the Trans Mountain expansion to the West Coast remain in limbo, she said.

Premier Rachel Notley is scheduled to release an update at 1:00 pm MDT.

Observed Railway Age Canadian Contributing Editor David Thonas, "Bitumen-by-rail movements out of the province have essentially stopped as producers can not justify the cost of rail over pipelines when the price of competing high-quality oil is so low".

Alberta is leasing 4,400 railway cars - more than three-quarters new and the rest retrofitted.

Now the U.S. Gulf Coast, home to numerous refineries well-suited for Canadian heavy crude, is an attractive destination because heavy oil shipments from Venezuela are declining, provincial officials said. CN expects to handle 60 percent of Alberta's barrels, Chief Executive J.J. Ruest said in a statement. The province expects to generate revenue from the profit it turns on selling crude to refiners, as well as from the higher oil prices that the additional shipping capacity will support. "As with any of our commercial agreements, the details are confidential", CP said.

Initial estimates in November 2018 called for 7,000 rail cars, but the province decided only 4,400 would be required after finding more efficient rail routes to move the oil.

"We plan to ensure that outside of election cycles, the best interests of Albertans are taken care of", she said.

CN's Ruest said that the railroad "is now deploying important safety enhancing technologies, such as automated track inspection test cars, distributed air brake cars and automated train inspection portals".

Initial daily shipments of 20,000 barrels are expected to begin as early as July along tracks owned by CP Rail as well as Canadian National Railway Co. "This depends on future oil prices agreeably matching those in the government's spreadsheets", David Thomas commented.

The Alberta government will lease 4,400 rail cars to move oil out of the province, resulting in 120,000 barrels per day by mid-2020, Premier Rachel Notley announced Tuesday afternoon as part of the crude-by-rail strategy. "You can let the commercial deals work and let commerce take place and the deals will drive right good business decisions and investment decisions", Creel said, adding that the moves caused "uncertainty". "We will not allow the NDP to write a multi-billion-dollar check that taxpayers can not afford".

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