Canadian Pacific (TSX: CP) (NYSE: CP) today announced that it will be
moving additional Bakken crude oil by unit train rail from a planned
industry logistics hub served by its North Dakota network.
The Van Hook, North Dakota, facility, to be developed by U.S.
Development Group (USD), will handle crude oil and related products from
the Bakken formation and will have initial capacity to handle up to
35,000 barrels per day at eight automated truck-unloading positions.
Located on CP’s Bakken North Dakota network, the hub will efficiently
facilitate the loading of product via onsite tankage from truck or
pipeline to rail car for movement to markets across North America. This
high-capacity facility will become part of the largest crude-by-rail
network in the U.S. and will initially allow for the assembly of 15 to
17 crude unit trains per month, numbering up to 104 rail cars, for
haulage on CP’s extensive network and to all parts of North America.
Capacity will expand to accommodate up to 30 unit trains per month once
the terminal is fully developed.
“CP’s commitment to joint market development, service and infrastructure
enhancements in the Bakken region make them an important partner as USD
continues to grow our network of crude origins and destinations,” said
Dan Borgen, USD President and CEO. “We have a strong market opportunity
in front of us — by working in close collaboration with CP, our
customers and the community, we can safely and rapidly maximize rail
shipments of Bakken crude.”
“This partnership with USD strengthens our network and advances our
strategy to drive volume growth, expand network capacity and achieve
targeted improvements in our operating efficiency,” said Jane O’Hagan,
CP Executive Vice President and Chief Marketing Officer. “This agreement
reinforces our railway’s established reputation for safely moving energy
products and delivering these products to market. We remain committed to
continuing to provide the capacity our customers need to grow and to
continue growing alongside them.â€
“We have extended our energy franchise with ongoing capital investments
on our U.S. Midwest network and are moving forward with our 2012
accelerated capital plan which includes investments that support our
energy growth strategy,” O’Hagan said. “These investments expand
network capacity and enhance our proven oil-by-rail service model in
order to meet increased traffic demands from the Bakken play and the
input growth it will drive for inbound materials such as frac sand and
pipe. By taking advantage of our network to the Northeast U.S. and
through our Kansas City gateway to the U.S. Gulf Coast, Canadian Pacific
is able to partner with the energy industry to facilitate further growth
in moving oil and energy-related materials.”
The new Bakken crude origination terminal will join USD’s St. James Rail
Terminal (Louisiana), Eagle Ford Crude Terminal (Texas), Niobrara Crude
Terminal (Colorado) and Houston Rail Terminal as part of a nationwide
network of crude oil and related products terminals. USD, which
pioneered the hub concept, is actively developing additional terminal
locations for safe and efficient rail movements of oil, condensate, and
related products from major production areas to refining and
distribution centres across North America.
Canadian Pacific is the only North American railroad to serve the Bakken
Formation, the Alberta Industrial Heartland, and the Marcellus Shale. In
addition, CP is the only Class I railway to connect the energy hubs of
the U.S. Midwest, Alberta and Saskatchewan to the Northeast U.S. Through
its network to the Northeast U.S., and through the Kansas City gateway
to the U.S. Gulf Coast, CP is able to partner with the energy industry
to facilitate growth in moving oil and energy-related materials. Each
year, CP moves hundreds of thousands of carloads of energy-related
products, including crude oil, sulphur, fuels, diluents and materials
key to the energy industry, such as pipe and frac sand.
