The Globe and Mail reports in its Wednesday, July 17, edition that Canadian Pacific Railway boss Keith Creel says delays in building new pipelines have reshaped the business of hauling Alberta crude by train into one with a longer lifespan. The Globe's Eric Atkins writes that CP is reaching contracts with longer terms at better prices.
Mr. Creel believes the crude-by-rail volumes will fall within five years when the three major proposed projects are operating. He is reluctant to make large capital investments to serve the energy sector. He said on Tuesday, however, that pipeline delays will extend the crude-by-rail boom for longer than the two- to three-year timeline industry watchers and participants have expected.
Mr. Creel said on Tuesday: "There is so much uncertainty with the pipelines [that] a three- to four- to five-year discussion [with producers and shippers] is possible. I still believe that pipelines will be built. There's too much of a critical need. There's just a lot of noise and a lot of hoops and obstacles to get through, but they will come."
The lack of pipeline space -- compounded by rising oil production -- has driven new volumes to the rails and caused oil patch crude to be discounted.
© 2020 Canjex Publishing Ltd. All rights reserved.