Alberta makes a move to get its oil to market


The Canadian province, which holds the world's third-largest crude reserves, plans to net C$2.2 billion ($1.7 billion) after investing C$3.7 billion to lease tank cars and buy service from rail providers, generating C$5.9 billion from sales and increased royalty and tax revenue, according to a statement on Tuesday.

It says 4,400 leased railway cars will move up to 120,000 barrels of oil per day by 2020.

"This is something that is fundamentally important to the return that all Albertans get for our energy resources", Notley said, while also dismissing suggestions that the oil-by-rail contracts should not have been signed so close to a provincial election.

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

The APMC is projecting a US$4 per barrel narrowing of the price differential between WCS (Western Canadian Select) crude and the baseline WTI (West Texas Intermediate) price from early 2020 to late 2022.

Imperial Oil Ltd. criticized the Alberta government's curtailment order and said it had scaled back its oil-by-rail shipments to zero this month from more than 160,000 bpd in December 2018.

"If it's going to be uneconomic for them, they're going to take down rail", said Walls. "The cars we will be using will be the safest cars on the tracks".

Alberta Official Opposition UCP (United Conservative Party) leader Jason Kenney said he will review all government contracts signed after February 1 to prevent Notley's NDP (New Democratic Party) government from forging "sweetheart deals" in the lead-up to the upcoming Provincial election.

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"Pipelines will always be the best, most efficient, most economical long-term solution", Alberta Premier Rachel Notley told a news conference.

It is also noted that the increase in oil cars will not have an impact on agricultural shipments.

She said the province had to act in order to lift prices for Canadian heavy oil, which as recently as December suffered record-setting discounts relative to USA benchmarks.

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.

"If elected, a United Conservative government will subject today's proposal to that value-for-money review", Kenney said.

"We are confident that this will turn out to be a good business decision for taxpayers", she said.

The rail plan has a few differences from the outline Notley provided in a speech in November.