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Alberta producers looking to rail new production

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A deal is being hatched between two Alberta oil producers and the Alberta government to allow production increases over the current allotments if the excess production is shipped out by rail.  The problem has been that limited pipeline takeaway capacity has caused massive discounting of Alberta crude, specifically heavy oilsand oil, thus hurting all the players.  However, if the producers agree to only use excess rail tank cars to haul their new production to market, then presumably that would not put further pressure on constrained pipeline capacity, which would otherwise push down prices. 

If this deal goes through, and I am betting it will, then Canada starts to ramp up back into the big-time. Remember that the previous Alberta government placed an order for some 4,400 rail tankcars, and those should start coming off the production line in numbers right about now. 

https://ca.investing.com/news/commodities-news/canada-oil-companies-hopeful-on-deal-with-alberta-government-to-boost-production-1926569

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1 hour ago, Jan van Eck said:

If this deal goes through, and I am betting it will, then Canada starts to ramp up back into the big-time. Remember that the previous Alberta government placed an order for some 4,400 rail tankcars, and those should start coming off the production line in numbers right about now. 

I am with you on this, I remember the order for rail-tankers and that I think in November or so. 300k bbl per day probably. Every little bit keeps prices in check and me personally I would rather help our neighbors to the north than Mid-East producers.

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(edited)

On 7/25/2019 at 10:54 PM, Old-Ruffneck said:

I am with you on this, I remember the order for rail-tankers and that I think in November or so. 300k bbl per day probably. Every little bit keeps prices in check and me personally I would rather help our neighbors to the north than Mid-East producers.

Original Government rail cars deal was canceled. The private proposal probably goes thru . 

Can't ship dilbit in rail cars .  Regular and Syncrude only. Buffet recently invested in Syncrude producer Suncor . It's all about the cash flow.

Edited by Falcon
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