Cenovus shares get a lift from wanton rail deals
Cenovus Energy Inc. shares increasing scarcely 7 per cent after a oilsands writer pronounced it sealed three-year deals with Canada’s vital rail companies to pierce 100,000 barrels per day of complicated wanton oil by rail.
The Calgary-based company’s shares gained 81.5 cents or 6.8 per cent during $12.825 in late-morning trade on a Toronto Stock Exchange.
Chief executive Alex Pourbaix pronounced after markets sealed on Wednesday a deals will concede a association to go around clogged pipelines that are related to multi-year high discounts in prices for Canadian complicated oil contra New York-traded benchmark crude.
Cenovus says it has struck a understanding with Canadian National Railway to pierce oil from Cenovus’s depot northeast of Edmonton and with Canadian Pacific Railway by USD Partners’ depot in Hardisty, Alta.
Transportation from both is to start in a second entertain of subsequent year and ramp adult by 2019.
Cenovus says it is awaiting all-in costs to ride a oil from Alberta to a U.S. Gulf Coast in a mid- to high-teens in U.S. dollars per tub — rail is generally some-more costly than shipping by pipeline.
The National Energy Board reported that crude-by-rail exports from Canada rose above 200,000 barrels per day in Jun for a initial time, adult from about 110,000 bpd 12 months earlier.
“Our rail plan provides a means of mitigating a cost impact of tube congestion,” pronounced Pourbaix.
“While we sojourn assured new tube ability will be constructed, these rail agreements will assistance get a oil to higher-price markets.”
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Article source: https://www.cbc.ca/news/canada/calgary/crude-by-rail-cenovus-shares-boost-1.4841031?cmp=rss