CN Rail Saves Critical Link to Alberta Oil Sands Region

Canadian National Railway Co. (CNI) said Monday it will acquire the Athabasca Northern Railway [ANY] for $25 million, in order to preserve a critical rail link to the oil sands region of northern Alberta. It will also invest another $135M over the next three years in rail-line upgrades to improve transit times and service consistency, it said. The purchase and upgrades, CN said, are premised on long-term traffic volume guarantees it has negotiated with its shippers "CN is focused on the future. While ANY’s current traffic volumes are too low to keep it going as a stand-alone operation, we and our shipper partners see the ANY playing a critical role in one of the world’s largest construction projects – the oil sands reserves in northern Alberta are second only to Saudi Arabia’s, and industry is expected to invest more than C$100 billion over the next decade in oil sands development, construction and infrastructure upgrading.”

Shares gained 1.6% to $47.74 in a shortened NYSE trading session.

Sources: Press release
Additional Reading: Buying Opportunity for Investors at CN Rail

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