Canexus pays high price for winning Canadian crude-by-rail race
By Nia Williams
CALGARY Alberta (Reuters) - Canexus Corp CUS.TO, the developer of Canada's first dedicated oil train terminal, has embraced the crude-by-rail boom with little success so far. Its shares are down 45 percent over the past year and the company is expected to report a weak quarter on Tuesday.
The company's Bruderheim terminal, 55 kilometers (35 miles) northeast of Edmonton, Alberta, is one of seven unit train terminals operating or under construction in Western Canada.
Although Canexus beat other midstream companies such as Gibson Energy Inc (GEI.TO: Quote) in the race to ship oil to market on mile-long trains, it is yet to see much benefit.
Some industry players are speculating the Calgary-based chemicals and handling company may have to sell Bruderheim to ease pressure on its balance sheet.
Asked about a potential sale, Lavonne Zdunich from Canexus investor relations said the company's portfolio of assets had not gone unnoticed and it would continue discussions with parties that had expressed interest.
Canexus also owns sodium chlorate and chlor-alkali plants in Canada and Brazil.
The cost of Bruderheim, planned as a 100,000 barrel-per-day loading facility offering Canadian crude producers an alternative to congested export pipelines, has risen by 60 percent as construction work fell behind schedule.
This year Canexus has revised costs up to C$355 million, cut its dividend and replaced its chief executive. Continued...