Canadian Pacific is expanding the transportation of crude oil by rail from the Saskatchewan Bakken Formation. CP is increasing volumes of crude oil movement by rail out of the oil formation through a new transload facility, operated by Bulk Plus Logistics in Estevan, Sask. This is in addition to railcar loads already moving out of the Dollard, Sask., transload facility 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 CP and part of the railway’s growing energy portfolio.
In the past three years, the volume of crude oil delivered by rail has increased significantly. Volumes of rail shipments out of North Dakota, for example, have grown from approximately 500 carloads in 2009 to more than 13,000 carloads in 2011 and are expected to increase to 70,000 annual carloads in the future.
“To move the crude by rail, CP will take what it has learned and apply it in the emerging Saskatchewan and Alberta Bakken markets,” said Tracy Robinson, CP energy and merchandise vice-president. “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 position CP’s products and capabilities in this rapidly emerging marketplace.”
Working with the development team, potential crude-by-rail shippers in Saskatchewan have been using CP service to test the viability of rail transport to their end terminals.
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.
Of the 140 million tons of freight shipped annually via CP, hundreds of thousands of carloads are directly related to energy production and distribution. This includes crude oil, sulphur, fuels, diluents and materials that are key to the energy industry such as pipe and frac sand.