The Canadian province of Alberta has agreed to divest its contracts to move additional crude by rail to market, Premier Jason Kenney said on Tuesday, but he declined to release details and said the agreements were still being finalized.
The contracts to ship a collective 120,000 barrels per day were negotiated by the previous New Democratic Party government, and Kenney has long said his government planned to transfer them to the private sector. Government officials have for months said that divestment was imminent.
Alberta’s provincial government has for more than a year curtailed oil production by its largest producers to reduce a glut in storage due to congested pipelines.
Kenney said the Alberta Petroleum Marketing Corporation was finalizing 19 agreements to divest the contracts, which involve rail cars, loading and unloading terminals and logistics. He said he could not yet provide further details due to commercial confidentiality concerns.
The cost of breaking the contracts would be C$1.3 billion ($978.18 million), lower than the C$1.5 billion Alberta had budgeted, Kenney said.
“Shipping crude by rail is something that the private sector is in the best position to be doing itself,” Kenney told reporters in Calgary.