Public-private partnership looks at rail link to oil sands

Petroleum News

Jim Gray, chairman of the newly-formed Athabasca Oil Sands Transportation Corp., and Mark Norris, Minister of Alberta Economic Development, announced funding March 29 for a C$2.5 million Oil Sands Transportation Initiative to study the feasibility of a heavy rail link directly into the oil sands in northeastern Alberta from Edmonton.

The C$2.5 million will be split evenly between the consortium of oil sands industry partners and the government of Alberta.

The announcement came less than two weeks after Premier Ralph Klein said the provincial government, CN Rail, oil sands producers and municipalities were considering building a new 265-mile link railway from the heavy-equipment staging area at Nisku, near Edmonton, to the oil sands “capital” of Fort McMurray to relieve congestion on northern highways. Klein said heavy equipment moving north “really ties up highways and causes safety problems.”

“Upgrading our transportation system is key to controlling costs and generating royalties for future generations,” Gray said in a press release March 29.

The study will determine if a heavy rail link, improved highways or a combination of both would best serve growth of the oil sands region near Fort McMurray.

“Alberta is proud to join the oil sands industry partners to study how to best unlock the region’s vast potential,” Norris said in a release. The study is to be completed by July 15. If its recommendations are approved by government and Athabasca Oil Sands Transportation, construction could begin in the spring of 2005, with completion scheduled for late fall of 2008, Gray said.