The government of Alberta on Thursday confirmed it is looking to transition a $3.7 billion plan to move as much as 120,000 barrels of crude per day by rail to the private sector, fulfilling an election promise.
Sonya Savage, the province’s energy minister, said in a release the government’s Alberta Petroleum Marketing Commission hired CIBC Capital Markets to divest the contracts.
The crude-by-rail plan was formed under the province’s previous New Democratic government when it instituted mandatory production cuts in January as Alberta oil prices plunged due to a lack of pipeline capacity. While the move helped boost prices, moving the crude-by-rail scheme out of government hands was one of the promises made by the United Conservative Party, which defeated the New Democrats in an April election.
“According to industry forecasts and statements by producers, the future of crude-by-rail in Alberta is very bright – and will continue to be so, without government interference,” Savage said in the release. “We have said from the beginning that shipping crude by rail is something that the private sector is in the best position to be doing itself.”
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