KSU - Canadian oil producers hope CP Rail deal will provide new route to Gulf Coast

Canadian Pacific Railway (CP) $25B takeover offer for Kansas City Southern (KSU) offers renewed hope for expanded access to U.S. Gulf Coast refineries for Canadian oil producers in the wake of the Biden's administration's rejection of the Keystone XL pipeline.Canadian National Railway (CNI) currently offers a direct route for oil producers to ship crude from Alberta to the Gulf Coast, but the combined CP-KCS railway network could introduce some competition among the railways to move those barrels."The combined railroad can offer one-railroad connectivity between Alberta and U.S. Gulf Coast markets via these existing KCS connections," and the deal could reduce overall shipping costs by boosting competition between CP and CN, says IHS Markit's Paul Bingham.Crude by rail currently accounts for ~5% of revenue at CP and 2% at KCS, and both companies believe the deal will boost those revenues."We believe CP and KCS networks are largely contiguous and these rails generally

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Canadian oil producers hope CP Rail deal will provide new route to Gulf Coast