Once Canada's oil relief valve, rail shipping grinds to near halt
published 29.07.2020 02:35
But large western terminals, owned by Cenovus as well as partnerships between Imperial Oil and Pembina Pipeline Corp , and USD Group and Gibson Energy , have mostly or completely idled, said John Zahary, chief executive of Altex Energy, which loads crude at four Western Canada terminals.
Even so, Pourbaix expects Canadian oil production to grow to fill expanded pipelines in coming years, reviving the need for rail.
He said they will stay parked pending several shifts - rebounding Canadian oil production, pipelines filling again, and a wider gap between Canadian and U.S. crude prices to justify rail shipments' higher cost than pipelines.
But oil production cuts this year opened pipeline space and eliminated demand for trains, leaving producers like Cenovus Energy Inc with high fixed expenses and monthly payments still owing to railways.
Rail was Canada's oil lifeline in recent years when cheaper pipelines ran full and crude had no other exit from landlocked Alberta.