Cenovus banks on crude-by-rail to gets its heavy oil to the Gulf Coast
Cenovus Energy announced a three-year deal with CP Rail and CN Rail to transport 100,000 bbl/day of crude from its SAGD operations in northern Alberta to the US Gulf Coast (USGC).
CN plans to start shipping crude from Cenovus' Bruderheim terminal sometime in the fourth quarter, while CP will begin shipments from USD Partner's Hardisty terminal in the second quarter of 2019.
Cenovus says shipping its product to the USGC will improve the selling price for its diluted bitumen. Crude-by-rail transport costs are expected at just under US$20 a barrel, although exact terms of the agreements were not disclosed.
According to the NEB, Canada's crude-by-rail exports to the US hit a record 207,000 bbl/day last July.