Canexus Corporation

TSX : CUS


Canexus Corporation

September 02, 2014 17:19 ET

Canexus Provides Update on NATO Unit Train Terminal

CALGARY, ALBERTA--(Marketwired - Sept. 2, 2014) - Canexus Corporation (TSX:CUS) ("Canexus" or the "Corporation") today announced the progress that has been made at the unit train facility at its North American Terminal Operations ("NATO") at Bruderheim, Alberta. Since the shutdown on June 17, 2014, the Corporation has completed construction of the 120,000 barrel Cold Lake Blend ("CLB") tank, installed the additional 12 loading arms and related infrastructure to allow for loading of unit trains on both sides of the loading rack, etc. and is ready for commissioning and start-up. Canexus is currently on budget in relation to all NATO activities planned for this shutdown.

During the shutdown, Canexus also completed modifications to the incineration system that are expected to double the number of railcars (from prior to the shutdown) that can be loaded at one time and is in the final stages of ordering a second incineration unit. The loading rack was also modified to accommodate the flow of incremental diluted bitumen, from additional pumping capacity that may be installed in the future, without needing to shut down the loading rack at that time.

As noted in our August 5, 2014 news release, Inter Pipeline Ltd. has completed the diluted bitumen pipeline lateral off the Cold Lake pipeline system from Beaverhill Station to Lamont Station and line fill of this lateral has now been completed with CLB product. During the shutdown, Canexus also completed the pipeline from Lamont Station to the connection point into the MEG Energy Corp. ("MEG") pipeline.

As a result, Canexus anticipated being able to meet its earlier-communicated schedule of commissioning and start-up prior to September 1, 2014. However, on August 20, 2014, MEG refused to permit Canexus to perform previously scheduled coldtap/cut work into the MEG pipeline to tie-in the Cold Lake pipeline system from Lamont Station into the MEG pipeline. This work is required for commissioning and start-up of the pipeline system for CLB product delivery to the Canexus unit train terminal. Canexus is of the strong opinion that MEG has no legal justification for its refusal, either under the pipeline agreement between MEG and Canexus or otherwise, and is seeking to enforce specifically the terms and provisions of the pipeline agreement to enable Canexus to immediately complete and commission the tie-in. Legal action is being taken to enforce all legal rights and remedies available to Canexus in order to protect Canexus' NATO business and enable Canexus to obtain the full benefits resulting from the tie-in.

"While we are disappointed with MEG's actions that have caused an unavoidable delay in the tie-in to the Cold Lake pipeline system and start-up of the unit train facility, we believe we are on a very strong legal footing and will be successful in completing the tie-in, in the coming weeks. We are working with our terminal customers to minimize the impact of this delay," said Doug Wonnacott, President and CEO.

Canexus intends to make no further public comment in respect of its dispute with MEG while the matter is the subject of legal proceedings.

Forward-Looking Statements

This news release contains forward-looking statements and information relating to expected future events relating to Canexus and its subsidiaries, including with respect to the commencement of legal proceedings against, and the progress and likelihood of success of such proceedings involving, MEG in relation to the pipeline agreement and expectations for the timing of completion of coldtap/cut work into the MEG pipeline, commissioning and start-up of the pipeline system and the impact on terminal customers. The use of the words "expects", "anticipates", "continue", "estimates", "projects", "should", "believe", "plans", "intends", "may", "will" or similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements for a variety of reasons, 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. Management believes the expectations reflected in these forward-looking statements are currently reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Due to the potential impact of these factors, Canexus disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

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 and is committed to Responsible Care® through safe operating practices. Canexus' common shares (CUS) and debentures (Series III - CUS.DB.A; Series IV - CUS.DB.B; Series V - CUS.DB.C; Series VI - CUS.DB.D) trade on the Toronto Stock Exchange. More information about Canexus is available at www.canexus.ca.

Contact Information

  • Canexus Corporation
    Richard McLellan, CA
    Senior VP, Finance and CFO
    (403) 571-7300

    Canexus Corporation
    Lavonne Zdunich, CA
    Investor Relations
    (403) 571-7356