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OTTAWA – Alberta is negotiating the purchase of cars to transport 120,000 barrels of crude oil per day (bpd) and plans to reach an agreement in a few weeks, said Premier Rachel Notley on Wednesday as the province , rich in energy, is taking steps to block oil blocked in the region due to lack of pipeline capacity.
Notley, who says the cars are needed to help deal with the stranded oil that has reduced the price of Alberta's oil, told a business audience that she was disappointed that the federal government was not helping to fund the oil. purchase.
Reuters revealed last week that Alberta had proposed a joint purchase of two unit trains and estimated the one-time capital cost at about $ 350 million. Federal officials are reluctant, saying supply problems will have been resolved by the time the first cars come on stream late next year.
Alberta estimates that it produces about 250,000 barrels a day more than can be shipped using existing pipeline and rail capacity.
"Alberta will buy the cars ourselves to haul this oil," Notley said in his speech. "We have already hired a third party to negotiate and work is well underway. We expect that agreement will be reached within a few weeks. "
She then told reporters that an agreement could be announced before the end of the year.
Alberta Premier Rachel Notley said the province is in talks to buy railroad cars to help ship the stranded oil.
John Woods Files / The Canadian Press
The office of the federal Minister of Natural Resources, Amarjeet Sohi, was not immediately available for comment.
On the basis of the initial discussions, Alberta expects the first capacity of 15,000 b / d to be operational in December 2019, to reach 120,000 b / d in August 2020, with a contract three years.
The increase in transportation capacity is expected to improve Canadian crude oil reduction by about $ 4 over three years, the government said.
On schedule, the first cars would be commissioned just as an expansion of the Enbridge Line 3 oil export pipeline is expected to begin. Two other major pipeline development projects are also underway, although the timing is unclear.
Notley, who reiterated its demand for greater pipeline capacity, said the cost of purchasing the cars would be fully amortized through royalties and the sale of transmission capacity.
FEDERAL HELP WANTED
Notley said there was "no excuse" for Ottawa not to help and criticized Prime Minister Justin Trudeau's government for proposing tougher environmental standards that would make building more difficult than ever before. pipelines.
The overabundance of supply "comes about because Canada is deliberately holding the hostage to the Alberta economy and the Alberta economy," she said, estimating the losses at 80 millions of dollars a day.
Ottawa denies that this is of any help, noting that he bought the Trans Mountain pipeline earlier this year.
Canada voluntarily retains the economy of Alberta and Canada
Rachel Notley
Several Canadian crude producers reduced their production and asked Alberta to impose reductions on other producers. Notley did not mention this idea in his speech.
His spokesman said the province of Alberta was not considering a "royalty holiday" to encourage production cuts, but said that a number of tools are considered, including the manner in which the fees are applied. She did not provide any other details.
Last week, Federal Finance Minister Bill Morneau said that companies would be allowed to write off additional investments, which he asked the oil industry executives.
© Thomson Reuters 2018
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