The Alberta of Canada to buy railroad cars; expects an agreement within a few weeks

By David Ljunggren

OTTAWA (Reuters) – The Canadian province of Alberta is in talks to buy wagons to transport 120,000 barrels of crude oil a day, and expects to reach an agreement in a few days. weeks, said Premier Rachel Notley on Wednesday, as the province, rich in energy, is taking action to move oil stuck in the region due to lack of pipeline capacity.

gi

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 non-recurring capital cost at about $ 350 million. Federal officials are reluctant to say that supply problems will have been resolved by the time the cars come on line by the end of next year.

The rail capacity of 120,000 b / d is almost equal to the current quantity of blocked supply.

"Alberta will buy the cars ourselves to get this oil … we have already hired a third party to negotiate and the work is going well and we expect the agreement to be reached in a few weeks," he said. said Notley in the text of his speech. .

Notley said last week that the province was willing to buy the train itself if Ottawa did not agree with the province's proposal to reverse costs.

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.

The Premier of Alberta said that there was "no excuse" for Ottawa and that he did not help Prime Minister Justin Trudeau's government to propose stricter environmental standards, which would make it more difficult than ever to build pipelines.

The overabundance "arises because Canada is voluntarily holding Alberta's economy and the Canadian economy hostage," she said, estimating losses at C $ 80 million. per day.

Ottawa denies that this is of any help, noting that he bought the Trans Mountain pipeline earlier this year.

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.

Last week, Finance Minister Bill Morneau said companies would be allowed to write off additional investments, a measure he called for.

(Report by David Ljunggren, edited by Phil Berlowitz)