(The Canadian Press circulated the following on December 26.)
MONTREAL — Canadian National Railway Co. has signed a deal to buy the Athabasca Northern Railway Ltd., a key railway link to the oilsands region of northern Alberta.
CN said Monday it will pay $25 million for the railway and invest $135 million in upgrades over three years to improve transit times and service consistency.
“CN’s investment and partnership agreements with key shippers will allow the parties to maintain important rail service to Lynton, Alta., a point near Fort McMurray, home of existing and future oilsands development,” CEO Hunter Harrison said in a statement. “While Athabasca Northern’s current traffic volumes are too low to keep it going as a stand-alone operation, we and our shipper partners see the Athabasca Northern playing a critical role in one of the world’s largest construction projects.”
The purchase and upgrade plans are premised on long-term traffic volume guarantees that the company has negotiated with Suncor Energy Inc., OPTI Canada Inc. and Nexen Inc.