Canexus Corporation Announces Expansion of North American Terminal Operations Capabilities to include Pipeline Connected Unit...
08 December 2012 - 2:35PM
Marketwired
Canexus Corporation (TSX:CUS) (the "Corporation" or "Canexus")
today announced Board of Director approval of the expansion of its
North American Terminal Operations ("NATO") at Bruderheim, Alberta
to include pipeline connected unit train operations. The
Corporation also announced that formal agreement has been reached
with MEG Energy Corp. ("MEG") to connect the Canexus Bruderheim
terminal ("Bruderheim" or "Bruderheim terminal") with pipelines
which interconnect with the MEG Energy Stonefell Terminal, and to
provide terminalling services to MEG for the loading of bitumen
blend for transport by rail and the receiving of diluent shipments
by rail.
In this next phase of NATO expansion, Canexus plans to connect
the Bruderheim terminal by pipeline (24 inch bitumen blend line and
12 inch condensate line) to MEG's pipelines which interconnect with
MEG's Stonefell Terminal, as well as potentially to a second
pipeline connected facility located nearby. In addition, it plans
to build out the rail infrastructure, loading/offloading and above
ground tank storage required to allow for unit train movement of up
to 118 tank cars (approximately 70,000 barrel movements) in single
trains daily. The cost of the project is expected to be
approximately $125 million, inclusive of the $45 million of
pre-spending authorized by the Board to date for long lead items
and other construction activities that are currently underway. This
expansion will be financed from the common share offering announced
on November 29, 2012 (the "Offering," which is expected to close on
December 19, 2012), excess distributable cash, committed credit
facilities and DRIP proceeds. The expanded capabilities should be
operational in the third quarter of 2013.
"We are pleased to announce full project approval of the
expansion of our Bruderheim terminal capabilities that will include
pipeline connected unit train operations for large scale movements
of bitumen blend and diluent by rail," said Mr. Gary Kubera,
President and Chief Executive Officer. "Agreement has been reached
with MEG Energy Corp. to connect Bruderheim with the MEG Energy
Stonefell Terminal. Significant progress on a potential second
pipeline/terminal connection to Bruderheim has also been made and
negotiations are proceeding with additional customers for unit
train shipments from Bruderheim under multi-year, take-or-pay
terms."
The Corporation expects this next phase of NATO expansion to be
accretive to all common shareholders after considering the common
share offering announced on November 29, 2012 (including the
over-allotment option if exercised). This next phase of expansion
sets the stage for future incremental unit train capability,
utilization of the existing 1.6 million barrels of salt cavern
storage, development of additional salt cavern storage and pursuit
of other attractive investment opportunities at this 480 acre
site.
About Canexus
Canexus produces sodium chlorate and chlor-alkali products
largely for the pulp and paper and water treatment industries. Our
four plants in Canada and two at one site in Brazil are reliable,
low-cost, strategically-located facilities that capitalize on
competitive electricity costs and transportation infrastructure to
minimize production and delivery costs. Canexus also provides
fee-for-service hydrocarbon transloading services to the oil and
gas industry from its terminal at Bruderheim, Alberta. Canexus
targets opportunities to maximize shareholder returns and delivers
high-quality products to its customers. Canexus common shares (CUS)
and debentures (Series I - CUS.DB; Series III - CUS.DB.A; Series IV
- CUS.DB.B) trade on the Toronto Stock Exchange. More information
about Canexus is available at www.canexus.ca.
Forward Looking Statements
This press release contains forwarding looking statements. More
particularly, this press release contains statements concerning the
closing of the Offering and the anticipated use of the net proceeds
of the Offering, statements concerning expectations for the
interconnection of the Bruderheim terminal and the MEG Energy
Stonefell terminal and the initial capacity, cost expectations,
timing for completion and contribution to operating cash flow of
the Bruderheim terminal, statements concerning expectations for a
second pipeline/terminal connection and expectations for securing
customers at Bruderheim under multi-year, take-or-pay agreements.
By their nature, forward looking statements involve a variety of
assumptions, known and unknown risks, uncertainties and other
factors that may cause actual results to differ materially from
those anticipated in such forward-looking statements including
market and general economic conditions, future costs, treatment
under governmental regulatory, tax and environmental regimes and
the other risks and uncertainties detailed under "Risk Factors" in
the Corporation's Annual Information Form filed on the
Corporation's SEDAR profile at www.sedar.com. Although Canexus
believes that the expectations reflected in these forward looking
statements are reasonable, undue reliance should not be placed on
them because Canexus can give no assurance that they will prove to
be correct. Since forward looking statements address future events
and conditions, by their very nature they involve inherent risks
and uncertainties.
The closing of the Offering could be delayed if Canexus is not
able to obtain the necessary regulatory and stock exchange
approvals on the timelines it has planned. The Offering will not be
completed at all if these approvals are not obtained or some other
condition to the closing is not satisfied. Accordingly, there is a
risk that the Offering will not be completed within the anticipated
time or at all. The intended use of the net proceeds of the
Offering might change if the Board of Directors of Canexus
Corporation determines that it would be in the best interests of
the Corporation to deploy the proceeds for some other purpose.
The forward looking statements contained in this press release
are made as of the date hereof and Canexus undertakes no
obligations to update publicly or revise any forward looking
statements or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws.
Contacts: Canexus Corporation Gary Kubera President and CEO
(403) 571-7300 Canexus Corporation Richard McLellan CFO (403)
571-7300 www.canexus.ca