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TheStreet Open House

CN Accelerating US$33-million Upgrade Of Wisconsin Branch Line To Accommodate Ramped Up Frac Sand Production

Stocks in this article: CNICNR

CHICAGO, IL, May 28, 2013 /PRNewswire/ - CN (TSX: CNR) (NYSE: CNI) announced today it is accelerating work on the US$33-million upgrading of its Whitehall Subdivision in Wisconsin to increase car-loading capacity and train velocity for the growing frac sand supply chains of Badger Mining Corporation, Preferred Sands of Wisconsin LLC, Atlas Resin Proppants LLC, and Taylor Frac LLC.

The improvement program will permit the transportation of heavier loaded frac sand freight cars weighing a maximum of 286,000 pounds, thereby increasing the volume per car, generating increased productivity for customer car fleets, and increasing train speed for CN.

CN will improve the 74-mile section of the Whitehall Subdivision between Wisconsin Rapids and Blair, Wis., in three years rather than four to obtain quicker customer gains. Work began in 2012 and the full program should be completed by December 2014.

Jean-Jacques Ruest, CN executive vice-president and chief marketing officer, said: "We are investing in increased rail capacity on the Whitehall Subdivision to help move more frac sand and to develop a more robust supply chain for our customers in Wisconsin to connect with the oil and gas shale basins in North America."

Frac sand is used by oil and gas industries in the hydraulic fracturing process to hold shale fractures open and let natural gas and oil flow out.

Stephen Hart, executive vice-president of Berlin, Wis.-based Badger Mining, said: "We have significantly increased the frac sand production capacity at our Taylor, Wis., facility, and CN's Whitehall Subdivision improvement will enhance our ability to efficiently move this production to both existing and new customers and markets. We are encouraged by this significant investment in our industry by CN. Badger has long understood the benefits gained from using rail to reach markets when compared to other modes of transportation: larger volumes, improved transit times, greater cost efficiencies and improved safety."

Bryan Hurtado, director of Preferred Pipeline, which provides logistics services for Preferred Sands of Wisconsin, said: "Our company has worked closely with CN for several years to build our frac sand and logistics business. CN's move to advance its rehabilitation of the line serving our plants and our partner suppliers' plants will help us to more economically and efficiently move product."

Dan Valiquette, executive vice-president of Atlas Resin Proppants of Taylor, Wis., said: "We appreciate CN's sizable investment in the Whitehall Subdivision, which will improve the effective utilization of our rail fleet, expand our product distribution, and ultimately provide better service to our customers in key shale markets."

Pat McConnell, chief executive officer of Taylor Frac of Green Lake, Wis., said: "Our company values its partnership with CN and sees the acceleration of its upgrading program for the Whitehall Subdivision as key to our plans to continue growing our market share."

CN is a true backbone of the economy, transporting approximately C$250 billion worth of goods annually for a wide range of business sectors, ranging from resource products to manufactured products to consumer goods, across a rail network spanning Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico. CN - Canadian National Railway Company, along with its operating railway subsidiaries -- serves the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the metropolitan areas of Toronto, Chicago, Detroit, Duluth, Minn./ Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the company's website at www.cn.ca.

Forward-Looking Statements

Certain information included in this news release is "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements, including statements relating to the growth of the frac sand market, involve risks, uncertainties and assumptions. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements.

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