Cenovus to buy Alberta oil train terminal from Canexus for C$75 mln
By Nia Williams
CALGARY, Alberta, June 4 (Reuters) - Cenovus Energy Inc , Canada's No. 2 independent oil producer, has agreed to buy the Bruderheim, Alberta, crude-by-rail terminal from Canexus Corp for C$75 million in cash, the two companies said on Thursday.
The 70,000 barrel-per-day Bruderheim facility was western Canada's first unit train terminal, capable of loading more than 100 tank cars of crude in one go, but it struggled to reach capacity and was put up for sale last August.
Construction costs on the project, 50 kilometers (30 miles) northwest of Edmonton, spiraled to C$355 million, Canexus said last year.
The Calgary-based chemicals and handling company, which also owns sodium chlorate and chlor-alkali plants in Canada and Brazil, said it will use the sale to pay down bank debt.
"By returning to our roots as a pure chemical producer, we are returning to what we do best," said Canexus Chief Executive Doug Wonnacott.
Cenovus is already a committed shipper at the Bruderheim terminal and will buy the unit and manifest train operations, pipeline connections to the facility and some above and below ground storage.
In a statement, Cenovus said the acquisition would help maximize market access, capture global prices for its oil and give access to niche markets not served by pipeline.
"As the owner of the facility, we reduce our risk of having to compete for expensive rail terminal capacity during periods of pipeline congestion or potentially having production volumes stranded," said Bob Pease, executive vice president of markets, products and transportation.
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