Cenovus Energy has signed three-year deals with major rail companies to transport heavy crude oil to U.S. Gulf Coast refineries.
The deals, which were announced Wednesday, would move approximately 100,000 barrels per day from northern Alberta.
CN will start moving oil from the company’s Bruderheim Energy Terminal starting in the fourth quarter of this year and CP will start moving through USD Partners’ terminal in Hardisty starting in the second quarter of 2019.
Cenovus President & Chief Executive Officer Alex Pourbaix said that although they remain confident that a new pipeline will be built, rail agreements will help get oil to higher-priced markets.
The plan also includes leasing of rail cars that meet or exceed all applicable current and announced regulatory requirements along with offloading logistics, marketing and other arrangements.
In a release Cenovus said there are still discussions about expanding the agreements to increase shipments.