A growing trend in railway shipment of crude oil and other assets has led to a record year for the second biggest railway in Canada.
Crude oil shipments grew a sizable amount in the railways 4th quarter and are expected to stay on an uphill climb. Currently the run rate is about 100,000 rail cars but is expected to rise to 120,000 in the 2nd quarter. Even though fuel costs continue to rise CP Railway still expect a double digit growth in earnings for 2019 compared to 2018.
As CP Railway goes into the new year with tremendous momentum, they also closed a $20 million multi-year agreement with Suncor Energy. This deal could potentially double the revenue in years to come. Along with Suncor Energy CP Railway also secured multi-year deal to ship refines fuels to Southern Ontario with an undisclosed company.
With Western Canada’s oil supply running at a surplus and pipelines running at capacity, companies like Cenovus Energy have signed deals with CP as well as Canadian National Railway Co. to ship up to 100,000 barrels of crude oil a day from Northern Alberta to the U.S Gulf Coast.