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Alberta estimates that it is producing about 250,000 bpd more than can be shipped using existing pipeline and rail capacity.

“Alberta will buy the rail cars ourselves to move this oil,” Notley said in her speech. “We have already engaged a third-party to negotiate and work is well under way. We anticipate conclusion of the deal within weeks.”

She later told reporters a deal could be announced before year end.

Photo by John Woods/The Canadian Press files

The office of the federal natural resources minister, Amarjeet Sohi, was not immediately available for comment.

Based on the initial talks, Alberta expects the first 15,000 bpd of capacity to come online in December 2019, ramping up to the full 120,000 bpd by August 2020, with the agreement running for three years.

The added transport capacity is expected to improve the Canadian crude discount by about US$4 over the three-year term, the government said.

Under the expected timeline, the first rail cars would roll out just as an expansion of Enbridge Inc’s Line 3 oil export pipeline is set to start operation. Two other major pipeline expansions are also in the works, though timing is unclear.

Notley, who reiterated her demand for more pipeline capacity, said the cost of buying the cars would be fully recouped through royalties and the selling of shipping capacity.

FEDERAL HELP WANTED

Notley said there was “no excuse” for Ottawa not helping and castigated the government of Prime Minister Justin Trudeau for proposing tougher environmental standards that she said would make it harder than ever to build pipelines.