(The Canadian Press circulated the following story by Dina O’Meara on May 29.)
CALGARY — Canadian Pacific Railway Co. is positioning itself to become a major transportation force in a new refinery row being developed near Edmonton to process bitumen from the growing oil-sands region of northern Alberta.
Canada’s second-biggest railway said yesterday it has sought regulatory approval to build new rail lines to serve planned and existing upgraders northeast of Edmonton in the province’s developing industrial heartland.
“This is all greenfield, nobody’s there today,” chief executive Fred Green told Canadian Press.
“You have a choice, you can either sit back or you can go first. We elected to try to be the enabler, and be the transportation company that will bring the industrial heartland to life.”
CP Rail has been buying up land discreetely and negotiating with corporations in the area for about a year to prepare for the filing, Green said.
But the railway won’t be laying any tracks before ensuring its cars will be full.
“We want to grow with these companies,” he said.
“If these companies make the investments, and grow and produce product, then we will build the railway. We will not build the railway hoping that somebody goes and builds an upgrader.”
CP Rail plans to pace its investment in the project with shipper commitments and as investment in the industrial zone increases.
The $15 million capital investment tagged for new infrastructure is modest compared to CP Rail’s $900 million capital budget, he said.
The initial layout will increase freight-handling and distribution capacity to carry construction materials needed for the oil-sands projects.
CP Rail already operates in the area but has made arrangements for 25.6 kilometres of new right of way that will allow the company to develop direct rail service to industries locating on either side of the North Saskatchewan River.
The so-called “project description,” the first step in the regulatory process, will be filed with the Canadian Transportation Agency immediately, the freight carrier said.
Several planned new refineries are slated for the region northeast of Edmonton to process heavy oil from the rapidly expanding oil-sands projects.
The railway sees transporting byproducts such as sulphur, petroleum coke, asphaltene and various liquids and gases created from bitumen upgrading to national and international markets on its existing network.
Separately, CP Rail said yesterday it may contract out heavy repair work on its tracks if a strike by maintenance workers lasts into the summer.
Nearly two weeks after 3,200 workers represented by the Teamsters union walked off the job, Green said he will not back down from his position that they must accept a company-wide wage-hike pattern. No talks are scheduled.
Yesterday in Toronto Stock Exchange trading, CP Rail shares fell 28 cents to $76.77.
The railroad is using workers from its management ranks to take care of the day-to-day maintenance.