CN expands service in western Canada, agrees to acquire H&R Transport

CN is expanding its operations in western Canada with two additional major export supply chain projects, the Class I announced yesterday.

Both projects are focused on maximizing the use of rail into the Port of Prince Rupert in British Columbia. The first train of thermal coal from Coalspur Mines Ltd.'s Vista Mine in Hinton, Alberta, has shipped to Ridley Terminals. CN is also delivering the first unit train of propane from Alberta for export via the new AltaGas Ridley Island Propane Export Terminal, according to a CN press release.

"Our objective is to help create export supply chains that get national resources to the best markets for our customers. These projects support jobs and increase Canada’s role as an international energy provider into Asia," said CN President and Chief Executive Officer JJ Ruest. "As these new projects and our record grain movements for the month of April demonstrate, our capital investments are strengthening our existing network and expanding our capacity to move more western Canadian natural resources to market safely and efficiently.”

In April, CN's total tonnage of grain moved out of western Canada set a record of 2.72 million metric tons (MMT), compared to the three-year average of 2.23 (MMT).

The AltaGas Ridley Island propane export terminal has been receiving propane since mid-April, and will provide access to more attractively priced markets in Asia for the propane derived from the natural gas industry in British Columbia and Alberta, CN officials said.

CN and AltaGas have been working with local communities and stakeholders in the Prince Rupert area, setting the foundation for a successful project, they added.

Meanwhile, the new Vista Mining complex is a surface mine operation expected to employ more than 350 people full time, CN officials said. With rail and terminal capacity, the project is focused on serving a growing demand for thermal coal in Asian markets. Coalspur has targeted initial annual production of 7 million tons, they added.

In January 2017, The Cline Group decided to build the complex,  which was a greenfield mining project located outside Hinton, said Mike Snelling, senior vice president, western operations, Coalspur.

"After less than 23 months, we've loaded our first unit train for export," he said. "This amazing accomplishment was made possible in part thanks to our partnership with CN who’s commitment and expertise in running a safe and efficient railroad has given us the required confidence to move forward on our long-term strategy for the Vista Mine to build an operation which will be an industry leader in safety, productivity, and operating costs."

Meanwhile, CN announced today it reached an agreement to acquire the intermodal division of H&R Transport Ltd. in Alberta. Financial details were undisclosed.

“H&R is well known in Alberta and across the industry for investing in its people, systems, and assets, as well as its customer centric services and best in class operations, all of which is aligned with CN’s strategy to expand our presence in moving consumer goods,” Ruest said.