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Cenovus Sees Alberta Premier Shifting Rail to Private Sector


Apr 24, 2019, by Kevin Orland
(Bloomberg)

Cenovus Energy Inc. Chief Executive Officer Alex Pourbaix said Alberta Premier-Elect Jason Kenney may be able to find a way to shift the province’s contracts for shipping crude by rail to private producers — an option preferable to scrapping the plan altogether.

Kenney, who takes office next week, has vowed to end predecessor Rachel Notley’s C$3.7 billion ($2.7 billion) investment in expanding the province’s crude-by-rail capacity, saying the government shouldn’t risk taxpayer money on the plan. Pourbaix said he’d still like to see that capacity come online because Alberta’s oil producers need more rail service to get their supply to market until new pipelines are built.

“There’s probably an opportunity where the government could ultimately get those rail contracts in the hands of producers, and that would strike me as better than terminating them,” Pourbaix said in an interview Wednesday. Christine Myatt, a spokeswoman for Kenney, declined to comment.

Cenovus is increasing its own ability to move crude by rail, signing contracts last year for 100,000 barrels of daily capacity. The Calgary-based company shipped 15,000 to 20,000 barrels a day under that program in the first quarter, with the only bottleneck being the delivery of the new rail cars, executives said on a conference call today.
 

 



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