Canadian Pacific expands Saskatchewan Bakken rail shipments

abarrelfullabarrelfull wrote on 09 Dec 2011 13:47
Tags: bakken canada midstream

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Canadian Pacific (TSX:CP)(NYSE:CP) is expanding the transportation of crude oil by rail from the Saskatchewan Bakken Formation.

CP is now increasing volumes of crude oil movement by rail out of the Saskatchewan Bakken oil formation through a new CP transload facility, operated by Bulk Plus Logistics in Estevan. This is in addition to railcar loads already moving out of the Dollard, SK transload facility, located on the Great Western Railway, a short line partner of Canadian Pacific. This oil is destined to various refineries in both Canada and the United States.

The Bakken Formation, encompassing sections of Saskatchewan and North Dakota, is a key area of focus for Canadian Pacific and part of the railway’s growing energy portfolio. In the past three years CP has demonstrated its ability to deliver crude oil by rail. Volumes of rail shipments out of North Dakota, for example, have grown from roughly 500 carloads in 2009 to more than 13,000 carloads in 2011. This is expected to grow to 70,000 annual carloads in the future.

“To move the crude by rail opportunities to the next level, CP will take what it has learned and the products developed in North Dakota and apply them in the emerging Saskatchewan and Alberta Bakken markets,” said CP Energy and Merchandise VP Tracy Robinson. “The model we developed in North Dakota is proven and we’re now bringing that north. To fully capitalize on these opportunities, CP has established a specialized Energy Development Team to proactively position CP’s products and capabilities in this rapidly emerging market place.”

CP provides crude shippers with supply chain options that are flexible, reliable, and offer short lead times from production to transportation. Working with CP’s Energy Development Team, new potential crude by rail shippers in Saskatchewan have been using CP service to test viability of rail transport to their ultimate end terminals.

“The Bakken Formation represents significant growth opportunities for the people of Saskatchewan and those involved in the development of this emerging market,” said Saskatchewan Energy and Resources Minster Bill Boyd. “I’m certain that CP’s experience and leadership in crude by rail transportation will prove effective in helping Saskatchewan producers with similar solutions, allowing them rapid entry into new markets.”

CP is investing more than $90 million to enhance capacity on its U.S. main line south of Saskatchewan, through North Dakota and into Minnesota to handle anticipated increased Bakken crude shipments. This includes upgraded track and sidings.

Canadian Pacific is the only North American railway to serve the Alberta Industrial Heartland, the Formation, and the Marcellus Shale. As well, CP is the only class 1 to connect the energy hubs of Alberta and the northern plains to the northeast U.S.

Of the 140 million tons of freight shipped annually on CP, hundreds of thousands of carloads are directly related to energy production and distribution. This includes crude oil, sulphur, fuels, diluents and materials key to the energy industry such as pipe and frac sand.

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