Alberta crude exports by rail uneconomic amid output cuts, Suncor VP says

Alberta's mandated oil production cuts are preventing Suncor Energy Inc., one of Canada's biggest oil producers, from sending its heavy crude to the U.S. Gulf Coast by rail, a company official said in an interview on Tuesday.

Gulf Coast oil refiners scrambling for heavy crude amid crisis in Venezuela

Steve Reynish, a Suncor executive vice-president, says the rise in heavy crude prices since Alberta's mandated production cuts have made rail shipments 'difficult to justify.' (Dave Rae/CBC)

Alberta's mandated oil production cuts are preventing Suncor Energy Inc, one of Canada's biggest oil producers, from sending its heavy crude to the U.S. Gulf Coast by rail, a company official said in an interview on Tuesday.

The Canadian oil producer is "interested in rail economics going forward," but the rise in Canadian heavy crude prices since the December mandated production cuts have made rail shipments "difficult to justify," said Steve Reynish, a Suncor executive vice-president, at the CERAWeek conference in Houston.

Gulf Coast oil refiners have scrambled for heavy crude supplies after U.S. sanctions on Venezuela's state-run PDVSA halted its exports of the grade to the United States.

Suncor sees the supply gap as "a great opportunity," but Canada already ships "everything we possibly can, given the pipeline and rail constraints," Reynish said.

The Alberta government should phase out the mandated output curtailment to "let the market react to signals we're getting," he said.

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