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Canada's First Oil-Sands Unit Train to Run in November

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Reuters

CALGARY, Alberta, Oct 3 (Reuters) - Western Canada's first crude-by-rail unit train terminal is set to start transporting 50,000 barrels per day of oil sands crude to the U.S. market next month, the CEO of operating company Canexus said.

The terminal in Bruderheim, Alberta, which will be expanded to 100,000 bpd by the second half of next year as a second supply pipeline is connected, initially will load only "dilbit" oil, or heavy bitumen crude from Canada's oil sands region mixed with 30 percent light condensate, Gary Kubera, chief executive of privately owned Canexus, said in an interview.

The facility is the first of a half dozen or so Canadian projects that have emerged over the past year to help carry more of the booming production from the Alberta oil sands by rail as producers seek alternatives to congested export pipelines. Shipping by rail is more costly, but also more flexible.

At present, the oil sands are only served by manifest trains hauling smaller loads, a less cost-effective mode of transport, but around 550,000 bpd of unit-train crude-by-rail projects - terminals that can load up to 120 rail cars a day - are due to start up in Western Canada by the end of 2014.

The Canexus terminal, which has been shipping 25,000 to 30,000 bpd of crude from Bruderheim on manifest trains since 2012, has already secured customer commitments for about 35 percent of its capacity. The company expects 70 to 80 percent of capacity to be under contract by the end of the year.

"The first unit train is set to run by the end of November," Kubera said.

"We expect unit trains will be going to the East, West, Gulf coasts. There is a lot of investment going into refineries to allow them to move crude by rail."


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