Monday, January 23, 2012

CN and CP reach long-term potash agreements with Canpotex

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Canadian National and Canadian Pacific reached separate 10-year agreements with Canpotex Limited to transport potash volumes that Canpotex ships to export martkets.

Under CP's agreement, CP will be Canpotex's principal Canadian railway, transporting a large majority of potash shipments to Canpotex's main terminal in Vancouver, B.C., Canada. In addition, in conjunction with Union Pacific, CP will transport all Canpotex potash shipments to Portland, Ore.

To move Canpotex's potash more efficiently and reliably, CP has enhanced the infrastructure of its north mainline and western corridor, which handle potash service originating from 10 Saskatchewan mines. Improvements made under CP's Multi-Year Plan are reducing average route miles and improving the capacity and responsiveness of the CP network. CP's infrastructure enhancements are part of its four-year capital investment program, approved by the board of directors in the fall of 2010.

The 10-year agreement between CP and Canpotex commences July 1, 2012. Terms and conditions of the agreement are confidential. The agreement improves unit revenues for CP, including a fully responsive fuel mechanism, to support investments for continued excellence in service execution and capacity for further growth. The agreement also reflects increased efficiencies and cycle time benefits realized from the fewer miles to port and a new "hook and haul" arrangement.

CN's 10-year agreement is effective July 1, 2012.

CN will haul via its southern British Columbia line a portion of what Canpotex exports through CN-served Neptune Terminals in North Vancouver.

CN and Canpotex will also continue work on the feasibility of a potential new potash export gateway terminal in Prince Rupert, B.C., Canada, which would be served by CN over its northern B.C. line.

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