Source Energy Services plant will have initial annual
production capacity of 1.2 million tons
CHICAGO, IL,
Dec. 9, 2013 /PRNewswire/ - 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 out.
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.
Forward-Looking Statements
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.
SOURCE CN