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September 09, 2011

Bakken oil shipping to get boosted using rail by over 500,000 barrels per day by the end of 2012

Kansas-based Lario Logistics said it will open a 100,000 barrel-per-day crude-by-rail terminal in North Dakota's Bakken Shale oil area this month, a move that will boost the region's capacity to ship crude on railways by about 75 percent.

North Dakota oil production has tripled in four years, reaching 380,000 bpd in June and reached 423,592 barrels per day in July.




The first unit train -- a configuration of some 100 railcars that can carry almost 70,000 barrels of oil -- is expected to depart BOE by October 1.

On the Gulf Coast, terminals are expanding to handle more rail shipments of crude from Bakken. The growth has been driven in part by premiums of up to $30 a barrel for Gulf Coast region crudes versus crude for delivery in landlocked Cushing.

By October, US Development Group is planning to double the daily receiving capacity of its St. James terminal to 130,000 bpd, or two unit trains, from 65,000 bpd now. The terminal has been receiving increasing volumes of Bakken crude.

Lario's facility in the Bakken could quickly be expanded to load as much as 250,000 bpd on high shipper demand, Magness said.

An additional 370,000 bpd of crude-by-rail loading capacity in the Bakken region is planned by several other companies before the end of 2012.


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