​MEG contracts loading capacity at Cenovus crude by rail terminal

Image: Joey Podlubny/JWN

Cenovus Energy is ramping up operations at its Bruderheim crude by rail terminal, and not just in order to load its own oil production.

The company is also helping clear the heavy oil glut out of western Canada by shipping volumes from another operator.

MEG Energy Corp. says its has entered into a three-year deal to access 30,000 bbls/d of Cenovus’s unit train rail loading capacity at Bruderheim.

The intermediate producer said it doubled rail volumes to 7,800 bbls/d in the third quarter, and has plans to rail approximately 15,000 bbls/d in the fourth quarter and up to 30,000 bbls/d by the end of the first quarter of 2019.

Also in the third quarter, Cenovus announced 100,000 bbls/d of three-year deals with major rail companies to move heavy oil from Alberta to the more price advantaged U.S. Gulf Coast. The rail agreements involve moving oil with CN from Cenovus’s Bruderheim Energy Terminal, which has already started, and with CP through USD Partners’ terminal in Hardisty, Alberta beginning in the second quarter of next year.

“Over the past few months, Cenovus has added resources at Bruderheim and increased shipments from the terminal and expects to continue ramping up its rail loading operations and railcar capacity through the end of 2019,” the company said.