The Best Crude Rail Play
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Four North American railroads are seeing explosive growth in shipment of crude due to a lack of pipeline capacity in the United States and Canada. But only one railroad, Canadian National Railway (NYSE: CNI), owns a rail to the massive Athabasca Oil Sands in Alberta, the largest known reservoir of crude bitumen in the world.
In 2007, CN acquired 201 miles of track from the Athabasca Northern Railway for $25 million and began $135 million in upgrades.
With TransCanada’s (NYSE: TRP) Keystone XL pipeline stuck in political turmoil in the United States, CN is best poised to grow crude shipments by rail from the Athabasca Oil Sands in Alberta to refiners. The Athabasca deposit is the largest known reservoir of crude bitumen in the world and the largest of three major oil sands deposits in Alberta, along with the nearby Peace River and Cold Lake deposits. The Alberta sands deposits contain about 169 billion barrels of oil, according to the Canadian Association of Petroleum Producers.