Companies Expand Oil Rail Capacity

Two recent stories have highlighted the efforts to increase transportation capacity from the Bakken in the face of large discounts for oil produced in the region.

Rangeland Energy L.L.C. announced that a 120-car train had begun operating from their COLT terminal in the Bakken.

Served by BNSF Railway Co., the COLT terminal provides outbound unit-train service to crude oil refiners, marketers and producers. A 21-mile COLT Connector bidirectional pipeline links the terminal with multiple existing and planned pipelines at Rangeland Energy’s Dry Fork Terminal near Tioga, N.D.

At the COLT terminal, unit trains are loaded with crude oil bound for markets throughout North America, including receiving terminals along the Gulf Coast, Rangeland Energy officials said in a prepared statement. The facility’s initial rail export capacity is 120,000 barrels per day.

“With four large crude oil refiners and marketers as anchor customers, along with upstream and downstream connectivity by pipeline and rail, the COLT Hub will create a point of liquidity for Bakken crude oil production by bringing together multiple buyers and sellers at the terminal,” said Rangeland Energy President and Chief Executive Officer Christopher Keene.

Similarly, Musket Corporation announced on the same day that their terminal at Dore, ND had expanded to an outbound capacity of 60,000 barrels per day.

“This state-of-the-art facility allows us to provide comprehensive solutions for our customers with marketing and logistics needs in the Bakken,” said JP Fjeld-Hansen, Managing Director for Musket. “The increased capacity allows Musket to deliver more efficiency to customers needing services from rail loading and supply chain management to price risk management and end markets.”

Musket first opened its Dore crude-by-rail facility in 2008. The Dore facility originally employed 20 people. With the expansion, employment opportunities will increase to 50 jobs.

That’s a total capacity of 180,000 barrels per day from just those two terminals, which ought to go quite a ways towards mitigating the lack of pipeline capacity that still challenges companies in the Bakken region. Until these issues are overcome, and pipeline capacity increases (which might take two or three years), trucks and trains will be the transportation mode of choice for getting Bakken oil to market.