The dramatic growth in North Dakota crude by rail during 2012 included large unit train terminals built to load 80 Mb/d or more. At the same time smaller companies successfully operated alongside the big guys – loading manifest trains at out-of-the-way terminals. North of the border in Saskatchewan, Canadian railroads are advertising their terminal facilities but most have limited capacity. Today we continue our crude by rail series with a look at the plethora  of smaller Bakken terminals.
The first episode in this series provided an introduction and overview of the “Year of the Tank Car” (see Crude Loves Rocking Rail). We described the rapid growth in US crude oil production that pressured pipeline logistics and made rail a viable alternative for moving crude to market. The second installment (see Crude Loves Rocking Rail – The Bakken Terminals) began our survey of rail loading terminals with a map and a complete list of facilities in North Dakota. The next episode covered EOG, Hess and Inergy, followed by Plains, Enbridge and Global.
In the episode immediately prior to today’s, (see Bakken Oil Express, Dakota Plains, BakkenLink and Savage) we reviewed three merchant terminals that operate as third party fee for service facilities as well as Dakota Plains who purchase the crude that they ship at the wellhead and deliver it to refiners rather than just offering transportation services to producers. Today we cover smaller load terminals in North Dakota and north of the Canadian border in Saskatchewan.
All of the episodes in this series can be found at the www.rbnenergy.com website under the Daily Energy Post tab. As you read this series you may find it useful to refer back to the map and table listing of Bakken terminals that we provided previously (click here to download a PDF copy of the map – let us know at firstname.lastname@example.org if you have trouble).
Musket Dore and Dickinson
Musket Corporation is a privately held commodity supply, trading and logistics company based in Houston. Since 2008 Musket has been buying oil from the wellhead in North Dakota and railing it first to Cushing and lately to the East Coast and the Gulf Coast. Musket has rail load capacity at two terminals in North Dakota. The larger terminal is at Dore in McKenzie County on the Northern BNSF mainline. Originally the Dore terminal had only 10 Mb/d capacity but in 2012 it was upgraded to a 60 Mb/d unit train facility with 90 MBbl of storage. The Dore terminal receives crude from trucks as well as the Continental Oil Banner pipeline gathering system. The Dickinson terminal is a small 10 Mb/d manifest truck to rail facility on the Southern BNSF line in Stark County that is also used by High Sierra Energy LP.
Red River Supply/Donnybrook
The Red River terminal, operated by Red River Supply is on the BNSF northern mainline in Williston, Williams County. The facility is a truck to rail loading terminal constrained by lack of space. There is no storage and only manifest load capability (40 rail tank cars). Another small terminal at Donnybrook on the CP line in Ward County (10 Mb/d) is owned by High Sierra that is used for truck to rail transloading. High Sierra is part of NGL Energy Partners. The Donnybrook terminal is also used by the Lansing Trading Group - an ethanol and grain trader.
Port of Minot
North Dakota Port Services, Inc. (NDPS) is a privately owned rail services company in Minot, Ward County. The Port of Minot terminal is on the BNSF Northern Tier Intermodal Line adjacent to BNSF’s main-line switchyard. This is a truck to rail loading facility only with estimated capacity of 10 Mb/d. Minot is some way East of drilling locations in North Dakota.
The Gascoyne terminal in Bowman County is another small transload terminal with current loading capacity of 10 Mb/d. The terminal is the only rail load facility on the Hettinger Subdivision of the BNSF system, south of the two BNSF mainlines and running west into Montana. Twin Eagle acquired Gascoyne when they purchased Enserco from Black Hills in January 2012. Enserco Midstream LLC operates the terminal and expects to expand its capacity although this is not confirmed. Enserco has a sizeable crude oil marketing operation in the Rockies and is planning a new rail terminal there. Twin Eagle Resource Management, LLC is a natural gas and electricity marketing, logistics and trading organization headquartered in Houston, Texas.
Canadian Bakken Terminals
There are a number of smaller crude rail loading terminals situated north of the Canadian border in Saskatchewan and Manitoba. Less detail is publically available about these terminals. Most are small in size with manifest loading capabilities. These terminals are either on the Canadian Pacific (CP) or the Canadian National (CN) networks except for one BNSF terminal being planned right on the border at Northgate. We have found useful information on four of these terminals that we provide below. For the rest we provide a table list as well as maps showing their approximate locations on the CP and CN networks.
Cromer Manitoba – Tundra Energy
This is a new construction terminal announced in October 2012 as a joint venture between CN and Tundra Oil and Gas – a Bakken producer to be built in Cromer, Manitoba (see CN map below). The terminal is relatively small truck loading facility with an initial load capacity of 30 Mb/d starting 2Q 2013 with potential to expand to unit trains at 60 Mb/d. Tundra has 410 MBbl storage at Cromer.
Northgate, SK - Ceres Global
Ceres Global Ag Corp. is an agriculture investment firm. They are building a $90 MM Canadian export hub at Northgate, SK on the North Dakota/Canada border to ship grains and crude oil into the U.S (see CN map below). The facility is linked to the BNSF network. Ceres own grain- storage facilities in Ontario and the U.S. as well as the Stewart Southern Railway in Saskatchewan (a short line that is shown on the CP map below). The project calls for two rail loops to handle unit trains – one of which will be used for oil with 70 Mb/d capacity. The facility is expected to start operations at the end of 2013.
Stoughton, SK and Dollard, SK - Crescent Point Energy
Crescent Point is a large publically owned Canadian oil producer with production assets in the Saskatchewan Bakken basin. The company owns two small terminals at Stoughton, SK (8 Mb/d capacity) and Dollard, SK (4 Mb/d) that are dedicated to loading their own production for rail shipment. The terminals are located on short line railroads that are connected to the CP network (see CP map below).
The table below lists all the Canadian Bakken terminals – giving the railroad and the location. The maps that follow show the CN and CP locations. The only additional information in the table (not mentioned above) is that the Bromhead, SK transload facility is operated by Torq Transloading. Torq is a Saskatchewan based logistics company that operates a network of trucks and rail to move about 45 Mb/d of oil through six terminals. The company is expanding further north in Canada and developing heavy oil rail loading facilities. More about Canadian heavy oil load terminals in the next episode in this series.
Source: RBN Energy (Click to Enlarge)
The map below is a snapshot from the Canadian National mapping tool. The four CN terminals in the table above are marked with yellow labels (Cromer, Bienfait, Woodnorth and Willmar). Also marked is the BNSF Northgate terminal being developed by Ceres on the Canadian border.
Source: CN Railroad and RBN Energy (Click to Enlarge)
The final map shows the Canadian Pacific rail load terminals with each of the facilities listed in our table marked with a yellow dot. You can see the extent of the Bakken Shale and Williston Basin formations crossing into Canada in this map. The short line private railroads are also shown. The CP network is more extensive in Saskatchewan. The CN network is concentrated to the East of the region.
Source: CP and RBN Energy (Click to Enlarge)
The terminals described in this episode are generally smaller than the large-scale merchant operations that we covered in our earlier Bakken episodes. A number of smaller trading/marketing companies are operating in the Bakken with more limited investment than the big guys – proving that the cost of entry to the crude by rail game is not at all prohibitive. We have heard tales of trucks loading oil onto manifest rail cars at remote terminals one at a time and then disappearing into the night.
The terminals north of the border in Saskatchewan and Manitoba are also quite small – with only one true unit train facility being developed by Ceres. The Crescent Energy terminals have limited capacity for a producer compared to the industrial scale operations that the likes of EOG and Hess have set up in North Dakota. The railroads are promoting their presence in Saskatchewan and there is a lot of talk about expanding Canadian crude by rail operations. For the most part however these terminals are small Transload facilities that would not support the kind of growth seen during 2012 in North Dakota. Estimates that we have heard put the volume of light crude moving by rail in Canada at the start of 2013 at 60 Mb/d and expected to expand to 100 Mb/d by the end of 2013 (source Peters).
In the next episode in our crude by rail odyssey we will stay in Canada and survey load terminals further north and west in the heavy oil region of the Western Canadian Sedimentary Basin. A number of projects are underway or being planned to load heavy bitumen crude onto rail cars for shipment to the US Gulf.
Each business day RBN Energy releases the Daily Energy Post covering some aspect of energy market dynamics. Receive the morning RBN Energy email by signing up for the RBN Energy Network.