A winding CP Potash crawls up the 2 percent grade near Lake Louise - 14 Oct 2010 Shawn Christie.

23 January 2012

Canadian Pacific Announces Long-Term Potash Agreement

Calgary Alberta - Canadian Pacific Railway Limited announced today a 10-year agreement with Canpotex Limited. Under the agreement, CP will be Canpotex's principal Canadian railway, transporting a large majority of potash shipments to Canpotex's main terminal in Vancouver, British Columbia. In addition, in conjunction with Union Pacific, CP will transport all Canpotex potash shipments to Portland, Oregon.
 
To move Canpotex's potash more efficiently and reliably, CP has enhanced the infrastructure of its north main line 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.
 
"Selection of CP to move the majority of our product to port is a reflection of the strength of our partnership and CP's ongoing commitment to efficiency in the supply chain and in helping to realize our growth objectives," said Steve Dechka, Canpotex's President and CEO.
 
"By upgrading our network, and through the ongoing implementation of our long train strategy, CP is continuing to strengthen our world class potash supply chain," said CP's President and CEO Fred Green. "We are now running potash trains up to 170 rail cars in length, further improving service, capacity, and efficiency."
 
"CP is pleased to provide the resource and infrastructure commitments necessary to support Canpotex's continued growth," added Mr. Green. "To better serve key customers like Canpotex, CP recently announced a $1.1 billion to $1.2 billion capital program for 2012 that includes the second phase of our $250 million north main line project. These value-enhancing investments position Canadian Pacific for long-term growth with strategic customers."
 
The 10-year agreement between CP and Canpotex commences 1 Jul 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.