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3/24/2021
Canadian Pacific's proposed $25 billion acquisition of Kansas City Southern offers "renewed hope" for expanded access to U.S. Gulf Coast refineries by Canadian oil producers in the wake of the Biden administration's rejection of the Keystone XL pipeline, according to a report by seekingalpha.com.
CN currently offers a direct route for oil producers to ship crude oil from Alberta to the Gulf Coast. But a combined CP-KCS rail network could introduce competition between the railroads to move more crude oil, the market analysis firm reported earlier this week.
"The combined railroad can offer one-railroad connectivity between Alberta and U.S. Gulf Coast markets via these existing KCS connections," and the deal could reduce overall shipping costs by boosting competition between CN and CP, said IHS Markit's Paul Bingham, as reported by seekingalpha.com.
In January, President Joe Biden cancelled the pipeline's construction from Canada through the United States. Last week, attorneys general from 21 states sued to overturn's Biden's action.