Premier Jason Kenney said on Wednesday he is hopeful of more progress this month on talks between his government and producers about easing oil curtailments, as long as extra output is shipped by rail.
Alberta introduced mandatory production curtailments, effective Jan. 1 2019, to ease congestion on export pipelines and support crude prices. Last month Premier Jason Kenney’s government extended those curtailments into 2020 because of slow progress in building new pipelines.
Major producers including Suncor Energy and Canadian Natural Resources Ltd have suggested the government allow them to boost output above curtailment limits, on the condition incremental production is exported by rail.
“We are working on that and hope to have some more progress by later this month,” Kenney told reporters on a conference call from New York, where he has been promoting Alberta’s energy industry to investors.
The government is also trying to offload onto the private sector nearly C$4 billion ($3 billion) of crude-by-rail contracts that were signed by the previous government, amounting to 120,000 barrels-per-day of crude.
Kenney said the two issues of increasing production and the rail contracts were tied.
“If we are going to see a way forward for additional shipments of Alberta crude-by-rail we also need to see producers assume those contracts at a fair price,” he said.