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CN repurchases short oil sands rail lines
CN Rail has repurchased a pair of short-line railroads in northern Alberta to provide feeder lines for the railroad’s bulk commodity and merchandise businesses. It had shed the lines back in the 1990s.
CN will pay C$26 million to RailAmerica, with a possible additional payment of up to C$4 million if the lines bring in more business, the company announced Jan. 19.
The lines being purchased are the Mackenzie Northern Railway and the Lakeland & Waterways Railway, both north of Edmonton. As part of the deal CN will also add the Central Western Railway, a 21-mile line in east-central Alberta used mostly for training. RailAmerica had announced it wanted to exit the Alberta business. Tracks will be upgraded CN plans to upgrade tracks on the Mackenzie and Lakeland lines to provide more capacity for hauling building materials, oil sands by-products, minerals, forest products and grain. The improvements are expected to cost around C$40 million.
The Lakeland line will boost CN’s oil sands area network, while the Mackenzie line will help serve the proposed Mackenzie Delta natural gas pipeline.
The 600-mile Mackenzie line runs north from Smith, Alberta, about 130 miles north of Edmonton, to Hay River, Northwest Territories. The Lakeland line connects with CN in the Edmonton area and runs 118 miles to Boyle, Alberta, where it connects with the Athabasca Northern Railway. The Central Western Railway links with CN near Drumheller, Alberta.
CN, which began operating the rail lines Jan. 19, has promised to honor existing labor contracts. The operations have a total of about 130 employees and handled about 50,000 carloads of freight last year.
—Allen Baker
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