Three New Projects Promise to Lift Truck/Rail Oil Transport

Three new projects, featuring transloading between trucks and trains, are being developed to tap the growing demand to transport crude oil generated by recent energy development efforts, according to separate announcements.

Enbridge Energy Partners LP said on Dec. 6 that it’s spending another $145 million to enhance capacity at a North Dakota terminal where crude oil from the Bakken formation is transferred from trucks to trains.

Just north of the U.S.-Canada border, Canadian Pacific Railway Ltd. announced on Dec. 7 that a new transload facility is being built in Estevan, Saskatchewan, also to move oil from the Bakken formation by rail to refineries.

Meanwhile, U.S. Development Group LLC announced plans to build a transfer terminal in Colorado to move oil from the Niobrara shale formation, also on Dec. 6.

The new facilities are the latest sign of growing transport-related activity linked to oil field projects, which have helped tank truck carriers to increase shipment volume by 14% this year over 2010 levels, according to American Trucking Associations.

Enbridge’s expansion will add capacity of 80,000 barrels per day at the facility in Berthold, N.D., which will feature a double-loop loading configuration for railcars. The company also announced that it anticipates having contract commitments in place to use all capacity at the facility served by BNSF Railway.

“Our Berthold rail project complements a series of expansions Enbridge has undertaken to expand transport capacity from North Dakota,” said Mark Maki, president of the Enbridge partnership. “It allows producers and shippers the ability to continue to grow their business while Enbridge develops the next phase of pipeline expansions.”

In total, Enbridge aims to add capacity to ship 145,000 barrels daily, including the newly announced expansion, with a total cost of $370 million. Scheduled completion is 2013. The company is developing pipeline projects to move crude from the Bakken formation in western North Dakota and eastern Montana.

About 100 miles north of Enbridge’s terminal, the Canadian Pacific facility will be operated by Bulk Plus Logistics, a contract operator.

CP already is moving crude from a terminal in Dollard, Saskatchewan, where short-line carrier Great Western Railway provides rail service.

In its statement, Canadian Pacific said it hopes to generate 70,000 carloads from the Bakken formation at some future date. Shipments this year are expected to total 13,000, compared with just 500 in 2009.

“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 Tracy Robinson, vice president of energy and merchandise. She added that the company has developed a specialized energy development group to capitalize on opportunities.

The Colorado project announced by U.S. Development Group is the firm’s third such facility and will be located near Carr, about 75 miles north of Denver to tap the Niobrara shale area.

“Strategically located near the developing Niobrara production area, the new terminal gives producers a safe, efficient and flexible way to transport their product to the lucrative Gulf Coast refining and distribution market,” said Mike Day, vice president of U.S. Development Group.

The new terminal will have 30 truck positions and is designed to accommodate 35,000 barrels per day to be transferred to Union Pacific Railroad with the capacity to hold 120 rail cars by the first quarter.

U.S. Development Group also has two other facilities to handle crude and intends to build more terminals, its statement said.