Canadian Pacific (TSX: CP) (NYSE: CP) today announced that it will be moving additional Bakken crude oil by unit train rail from a planned industry logistics hub served by its North Dakota network.
The Van Hook, North Dakota, facility, to be developed by U.S. Development Group (USD), will handle crude oil and related products from the Bakken formation and will have initial capacity to handle up to 35,000 barrels per day at eight automated truck-unloading positions. Located on CP's Bakken North Dakota network, the hub will efficiently facilitate the loading of product via onsite tankage from truck or pipeline to rail car for movement to markets across North America. This high-capacity facility will become part of the largest crude-by-rail network in the U.S. and will initially allow for the assembly of 15 to 17 crude unit trains per month, numbering up to 104 rail cars, for haulage on CP’s extensive network and to all parts of North America. Capacity will expand to accommodate up to 30 unit trains per month once the terminal is fully developed.
“CP’s commitment to joint market development, service and infrastructure enhancements in the Bakken region make them an important partner as USD continues to grow our network of crude origins and destinations,” said Dan Borgen, USD President and CEO. “We have a strong market opportunity in front of us -- by working in close collaboration with CP, our customers and the community, we can safely and rapidly maximize rail shipments of Bakken crude.”
"This partnership with USD strengthens our network and advances our strategy to drive volume growth, expand network capacity and achieve targeted improvements in our operating efficiency,” said Jane O’Hagan, CP Executive Vice President and Chief Marketing Officer. “This agreement reinforces our railway’s established reputation for safely moving energy products and delivering these products to market. We remain committed to continuing to provide the capacity our customers need to grow and to continue growing alongside them.”
“We have extended our energy franchise with ongoing capital investments on our U.S. Midwest network and are moving forward with our 2012 accelerated capital plan which includes investments that support our energy growth strategy,” O’Hagan said. “These investments expand network capacity and enhance our proven oil-by-rail service model in order to meet increased traffic demands from the Bakken play and the input growth it will drive for inbound materials such as frac sand and pipe. By taking advantage of our network to the Northeast U.S. and through our Kansas City gateway to the U.S. Gulf Coast, Canadian Pacific is able to partner with the energy industry to facilitate further growth in moving oil and energy-related materials.”
The new Bakken crude origination terminal will join USD’s St. James Rail Terminal (Louisiana), Eagle Ford Crude Terminal (Texas), Niobrara Crude Terminal (Colorado) and Houston Rail Terminal as part of a nationwide network of crude oil and related products terminals. USD, which pioneered the hub concept, is actively developing additional terminal locations for safe and efficient rail movements of oil, condensate, and related products from major production areas to refining and distribution centres across North America.
Canadian Pacific is the only North American railroad to serve the Bakken Formation, the Alberta Industrial Heartland, and the Marcellus Shale. In addition, CP is the only Class I railway to connect the energy hubs of the U.S. Midwest, Alberta and Saskatchewan to the Northeast U.S. Through its network to the Northeast U.S., and through the Kansas City gateway to the U.S. Gulf Coast, CP is able to partner with the energy industry to facilitate growth in moving oil and energy-related materials. Each year, CP moves hundreds of thousands of carloads of energy-related products, including crude oil, sulphur, fuels, diluents and materials key to the energy industry, such as pipe and frac sand.
Note on forward-looking information - Canadian Pacific
This news release contains certain forward-looking statements relating but not limited to our operations, proposed investments, anticipated financial performance and business prospects. Undue reliance should not be placed on forward-looking information as actual results may differ materially.
By its nature, CP's forward-looking information involves numerous assumptions, inherent risks and uncertainties. Forward-looking statements are not guarantees of future performance. Factors that could affect forward-looking information include, but are not limited to: changes in business strategies; general North American and global economic, credit and business conditions; inflation; currency and interest rate fluctuations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; actions by regulators; potential increases in maintenance and operating costs; uncertainties of litigation; risks and liabilities arising from derailments; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; technological changes; and various events that could disrupt operations, including severe weather conditions, flooding, earthquakes, labour disputes, risks and liabilities arising from derailments as well as security threats and governmental response to them. Other risks are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to "Management's Discussion and Analysis" in CP's annual and interim reports, Annual Information Form and Form 40-F for a summary of major risks.
Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific (TSX:CP)(NYSE:CP) operates a North American transcontinental railway providing freight transportation services, logistics solutions and supply chain expertise. Incorporating best-in-class technology and environmental practices, CP is re-defining itself as a modern 21st century transportation company built on safety, service reliability and operational efficiency. Visit cpr.ca and see how Canadian Pacific is Driving the Digital Railway.
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