Canadian Pacific

RBN Energy estimates that by 2015 rail terminal capacity to load heavy bitumen “dilbit” crude in Western Canada will be about 800 Mb/d. Unload terminals hoping to receive that crude on the Gulf Coast will have about 1 MMb/d capacity by 2015. Moving that crude by rail will compete directly with planned pipelines expected to be in service by 2015. Yet the details show only about 25 percent of Canadian rail terminals will be able to load railbit crude, which has less diluent. And the terminals that do handle railbit will not be handle larger unit trains. Today we continue our analysis of Canadian crude transport options.

During the past two years the US domestic crude transportation business has been revitalized by a huge increase in shipments of crude oil by rail. In the Bakken region alone over 600 Mb/d of crude is shipped to market by rail. The number of rail terminals in producing regions loading crude oil onto rail tank cars has increased from a handful at the end of 2011 to 88 and growing today. A further 66 crude oil unloading terminals have been built or are under construction. Today we summarize the crude oil terminal build out by region and by railroad.

The latest crude production estimates from North Dakota show continued growth to a new record of nearly 770 Mb/d in December 2012. The North Dakota Pipeline Authority estimates that 64 percent of that crude was transported to market by rail in December – up from 58 percent in November. Today we continue our survey of North Dakota crude rail loading terminals with an in-depth look at three facilities that between them can load 250 Mb/d of crude.

The US energy midstream sector will remember 2012 as the “Year of the Tank Car”. Venerable pipeline companies were reduced to investing in rail terminals. Although reluctant at first, coastal refiners embraced the margin boost that crude by rail provides them. Producers signed up to move landlocked crudes by rail to coastal destinations in search of higher prices.  Petroleum shipments increased 46 percent from 370 M carloads in 2011 to 540 M carloads in 2012. Rail car manufacturers struggled to meet an order book of 40,000 rail cars and the backlog for new delivery is 18 months. Today we begin a crude by rail series.