Source Energy Services plant will have initial annual production
capacity of 1.2 million tons
CHICAGO, IL, Dec. 9, 2013 /CNW Telbec/ - CN (TSX: CNR) (NYSE: CNI)
announced today it will start serving a new state-of-the art frac sand
producer on its Wisconsin rail network in December 2013.
The production facility of Source Energy Services (SES), formerly
Canadian Sand and Proppants, in Weyerhaeuser, Wis., is located on CN's
rehabilitated Barron Subdivision and will have an annual production
capacity of 1.2 million tons of high-grade sands, rising to 2 million
tons by the third quarter of 2014. In 2012, CN spent US$35 million to
restore a 40-mile segment of the subdivision between Ladysmith and
Poskin, Wis., to better serve the frac sand market.
CN has 11 frac sand facilities on its network in Wisconsin, which is
seeing a substantial increase in frac sand production because of its
reserves of high-quality and in-demand sands. These industrial sands
are used by the oil and gas industry in the hydraulic fracturing
process to hold shale fractures open to let natural gas and oil flow
Brad Thomson, president and chief executive officer of Calgary,
Alta.-based SES, said: "SES is excited to partner with CN on this
project, which will advance our goal of becoming a major player in the
frac sand industry. In conjunction with the opening of the production
facility in Wisconsin, SES will also bring on-line the largest frac
sand terminal in the Western Canadian Sedimentary Basin in Wembley,
Alta., on CN's network near Grande Prairie. With a loop track and
on-site storage capacity of 40,000 metric tonnes of sand, this will be
SES's ninth and largest terminal on a network that spans North America,
from Ft. Nelson, B.C., to Three Rivers, Tex.
"Working with CN will position us strongly in the frac sand marketplace
with timely rail access to Western Canadian shales and other basins
throughout the United States and Canada."
Claude Mongeau, CN president and chief executive officer, said: "CN's
network is uniquely positioned to provide Wisconsin frac sand producers
efficient access to key North American shale deposits.
"In addition to our investment on the Barron Sub in 2012, CN accelerated
work this year on the US$33 million-rehabilitation of 74 miles of track
between Wisconsin Rapids and Blair, Wis. This will increase car-loading
capacity and train velocity for the growing frac sand supply chains.
"Over the past five years, CN's frac sand market has grown by nearly 300
per cent, rising to more than 50,000 carloads in 2013. Our end-to-end
service focus has supported that growth, and we expect to achieve C$300
million in frac sand revenue by 2015."
CN is a true backbone of the economy, transporting approximately C$250
billion worth of goods annually for a wide range of business sectors,
ranging from resource products to manufactured products to consumer
goods, across a rail network spanning Canada and mid-America, from the
Atlantic and Pacific oceans to the Gulf of Mexico. CN - Canadian
National Railway Company, along with its operating railway subsidiaries
-- serves the ports of Vancouver, Prince Rupert, B.C., Montreal,
Halifax, New Orleans, and Mobile, Ala., and the metropolitan areas of
Toronto, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay,
Wis., Minneapolis/St. Paul, Memphis, and Jackson, Miss., with
connections to all points in North America. For more information on CN,
visit the company's website at www.cn.ca.
Certain information included in this news release is "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and under Canadian securities laws. CN
cautions that, by their nature, these forward-looking statements,
including statements relating to the growth of the frac sand market,
involve risks, uncertainties and assumptions. The Company cautions that
its assumptions may not materialize and that current economic
conditions render such assumptions, although reasonable at the time
they were made, subject to greater uncertainty. Such forward-looking
statements are not guarantees of future performance and involve known
and unknown risks, uncertainties and other factors which may cause the
actual results or performance of the Company or the rail industry to be
materially different from the outlook or any future results or
performance implied by such statements.
Important risk factors that could affect the forward-looking statements
include, but are not limited to, the effects of general economic and
business conditions, industry competition, inflation, currency and
interest rate fluctuations, changes in fuel prices, legislative and/or
regulatory developments, compliance with environmental laws and
regulations, actions by regulators, various events which could disrupt
operations, including natural events such as severe weather, droughts,
floods and earthquakes, labor negotiations and disruptions,
environmental claims, uncertainties of investigations, proceedings or
other types of claims and litigation, risks and liabilities arising
from derailments, and other risks detailed from time to time in reports
filed by CN with securities regulators in Canada and the United States.
Reference should be made to "Management's Discussion and Analysis" in
CN's annual and interim reports, Annual Information Form and Form 40-F
filed with Canadian and U.S. securities regulators, available on CN's
website, for a summary of major risks.
CN assumes no obligation to update or revise forward-looking statements
to reflect future events, changes in circumstances, or changes in
beliefs, unless required by applicable Canadian securities laws. In the
event CN does update any forward-looking statement, no inference should
be made that CN will make additional updates with respect to that
statement, related matters, or any other forward-looking statement.
For further information:
Director, Communications & Public Affairs
Vice-President, Investor Relations
Media & Investors