Canadian Pacific seeks approvals to better service Alberta's oil sands development
28 Maggio 2007 - 6:39PM
PR Newswire (US)
EDMONTON, May 28 /PRNewswire-FirstCall/ -- Canadian Pacific
announced today it has sought regulatory approval to construct rail
lines to serve planned and existing bitumen upgraders northeast of
Edmonton in Alberta's developing Industrial Heartland. "Acquisition
of the necessary land to assemble the rail right of way was a
strategically important initiative for CP," said CP President and
CEO Fred Green. "It strengthens CP's commitment to the growth
objectives of the oil sands industry, contributes to lasting
economic benefits for the Province of Alberta, and provides
significant scope for CP shareholder value creation." The railway
has made arrangements for 16 miles of right of way that will
provide the ability to develop direct rail service to industries
locating on either side of the North Saskatchewan River. The
"project description," the first step in the regulatory process,
will be filed with the Canadian Transportation Agency immediately.
"CP's expansion will provide rail access to new markets for the
industries which have made, or will make, the decision to invest in
the Industrial Heartland," said Green. "Our objective will be to
build in tandem with the oil sands upgraders and related businesses
to create a new network of rail access and strengthen the
industry's supply chain competitiveness in world markets." To lay
the foundation for this significant multi-year growth initiative,
CP will immediately invest $15 million in capital for new
infrastructure to increase fluidity and distribution and logistics
capacity. CP will first offer expanded transload capabilities for
in-bound construction materials, including dimensional shipments
required by the upgraders. "Our vision is to create a rail network
focused on the movement of by-products created from upgraders in
the Industrial Heartland which include sulphur, petroleum coke,
asphaltene and various liquids and gases," said Ray Foot, CP's
Vice-President of Marketing and Sales, Merchandise. "While the
market potential varies based on the timing of the upgraders and
facilities, the total rail market will be significant and we will
work closely with producers and governments at all levels to pace
the right level of capital investment to new business
opportunities." "The added benefit of this expansion offers
numerous community and environmental benefits to residents, the
energy sector, and the community," said Foot. "A single train can
replace as many as 280 trucks. This project will significantly
reduce traffic congestion, noise and environmental impact in the
area." Canadian Pacific, through the ingenuity of its employees
located across Canada and in the United States, remains committed
to being the safest, and most fluid railway in North America. Our
people are the key to delivering innovative transportation
solutions to our customers and to ensuring the safe operation of
our trains through the more than 900 communities where we operate.
Our combined ingenuity makes Canadian Pacific a better place to
work, rail a better way to ship, and North America a better place
to live. Come and visit us at http://www.cpr.ca/ to see how we can
put our ingenuity to work for you. Canadian Pacific is proud to be
the official rail freight services provider for the Vancouver 2010
Olympic and Paralympic Winter Games. Please see Canadian Pacific
and Alberta Industrial Heartland Backgrounder for more information
Canadian Pacific and the Alberta Industrial Heartland - Alberta's
Industrial Heartland (the "Industrial Heartland") is an association
formed in 1999 by four municipalities: the City of Fort
Saskatchewan, Strathcona County, Sturgeon County and Lamont County
to promote development of a large block of land zoned for heavy
industrial use. - Oil sands upgrader construction activity and
other energy-industry related developments are currently underway
or have been recently announced in the region, creating a demand
for increased transportation services and, specifically, additional
rail capacity. In addition to the existing AOSP Scotford Upgrader
currently being expanded and the BA Energy upgrader currently being
constructed, four other firms have announced plans for upgraders in
the Industrial Heartland, Fort Hills, Northwest Upgrading, North
American Oil Sands Corporation and Total. Additional upgraders such
as the Northern Lights project are possible. - Canadian Pacific
(CP) has assembled the necessary land and route, and is applying to
the Canadian Transportation Agency (CTA) to build rail lines that
will serve new oil sands upgraders and other facilities. - Canadian
Pacific's Scotford Subdivision is the key rail corridor connecting
CP's Calgary to Edmonton main line with Alberta's Industrial
Heartland region. Running 36.5 miles north-east from Edmonton to
Scotford, CP's operations on the Scotford Subdivision serve
established customers such as Shell Canada, and its existing oil
sands upgrader facility at Scotford. - CP maintains daily service
connecting its Scotford Yard facility with main line connections at
Edmonton. With expansion underway at Shell's existing Strathcona
County Upgrader, CP is looking to add capacity to its Scotford Yard
in addition to its Industrial Heartland expansion project. - CP is
proposing the addition of a new Sturgeon Subdivision which will
provide rail service to shippers located on the north side of the
North Saskatchewan River in Sturgeon County. - The Sturgeon
Subdivision is proposed to run north through industrial zoned
property within Strathcona County to a crossing of the North
Saskatchewan River. A proposed bridge over the North Saskatchewan
River will align the Sturgeon Subdivision to follow west and route
through a proposed Upgrader site. - On the Sturgeon Subdivision, CP
is also proposing a potential marshaling yard facility designed to
meet the service requirements of customers on the north side of the
North Saskatchewan River and, a spur line to meet future business
development projected for Sturgeon County and to provide a location
for trans-loading operations. - CP's long term focus is on moving
by-products created from the Industrial Heartland area upgraders
which include sulphur, petroleum coke, asphaltene and various
liquids & gases. Market potential varies based on the timing of
construction projects, but total rail market potential is
significant. - CP's short term focus is on inbound construction
material, including steel, pipe, cement, vessels, modules, etc.
However, total market potential is largely dependent on the timing
of construction projects. Oils Sands Development - Quick Facts -
Alberta's oil sands are one of the earth's largest bodies of oil.
Proven reserves are 174 billion barrels, second only to Saudi
Arabia. All current commercial oil sands deposits are located in
northern Alberta. In 2005, annual oil sands production reached 1.1
million barrels per day (bpd). In 2006, Canada's National Energy
Board forecast that base case bitumen production would rise to 3.0
million bpd by 2015. - Even when using only proven reserves,
Alberta's bitumen resource would be sufficient to handle Canada's
domestic oil demand for 250 years. - Typical oil sands deposits are
comprised of 75-80% inorganic material (quartz sand, silt and clay
predominantly), 10-12% bitumen and 3-5% water. - Bitumen normally
consists of very long chain hydrocarbon molecules. Relative to
light crudes, bitumen has an excess of carbon or shortage of
hydrogen. Bitumen is virtually a solid at ambient temperatures. -
In order to make bitumen acceptable for conventional refineries, it
must be upgraded to Synthetic Crude Oil (SCO). This intermediate
process produces higher value Synthetic Crude Oil (SCO) and related
byproducts. - Currently, two-thirds of the bitumen produced is
upgraded into SCO in Alberta before being shipped to downstream
markets. - While a wide range of technologies are used to upgrade
bitumen, in general the process consists of cracking bitumen under
heat and pressure in the presence of catalysts to break up the long
chain molecules into much smaller molecules. Excess carbon is then
either extracted from the bitumen or is combined with added
hydrogen in order to produce lighter hydrocarbons. - Upgrading
typically produces very light hydro-carbons known as "off- gasses".
Off gasses can be used as fuel in an upgrader, or if there is
sufficient quantity and economic value, some off gasses can be
processed and marketed separately as fuel or feedstock for
petrochemical plants. - Bitumen also contains impurities, that may
be extracted in the upgrading process. Most upgraders choose to
market "sweet" (low sulphur) SCO and so extract sulphur, the
largest contaminant, as part of the upgrading process. Sulphur
typically comprises up to 5% of bitumen. In addition, small amounts
of nitrogen may be extracted from the SCO and marketed separately.
Most of the byproducts produced by upgraders can be marketed.
DATASOURCE: Canadian Pacific Railway CONTACT: Media: Mark Seland,
Tel.: (403) 319-3566, Cell.: (403) 540-7178, ; Investment
Community: Janet Weiss, Tel.: (403) 319-3591,
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