TORQ to build 168,000 bpd Western Canada crude-by-rail terminal

Wed Aug 14, 2013 1:53pm EDT
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CALGARY, Alberta Aug 14 (Reuters) - Midstream oil company TORQ Transloading Inc said on Wednesday it plans to build a $100 million crude-by-rail terminal in Kerrobert, Saskatchewan, that will be able to load 168,000 barrels per day of oil.

It is the latest, and largest, in a recent rush of Western Canadian crude-by-rail projects as producers seek alternatives to congested pipelines to transport their crude to U.S. refining markets.

The Kerrobert Rail Terminal, to be served by Canadian Pacific Railway, will load two 120-car unit trains per day that will each carry both light and heavy crude.

TORQ Chief Executive Jarrett Zielinski said the location of the terminal in the southeast end of the oil sands region means shippers will be able to save about $5 a barrel on transporting crude to the U.S. Gulf Coast and to the East Coast, compared with shipping crude by rail out of northern Alberta, the center of the oil sands region.

Gibson Energy Inc, another midstream oil services company investing in train terminals to ship crude, has said it costs $14-$17 per barrel to transport crude from Hardisty, Alberta, to the U.S. Gulf Coast.

"Kerrobert, Saskatchewan, is geographically as close to the heavy crude's natural destination markets as possible by rail, minimizing transportation costs relative to similar crude types to be shipped by rail originating further north and west in Alberta," Zielinski said.

Privately owned TORQ is negotiating pipeline connections to deliver crude to the terminal, which will also take deliveries by truck.

The project will include storage tanks with up to 50,000 barrels of capacity, including heated storage that can handle undiluted conventional heavy oil from the Lloydminster region on the Alberta-Saskatchewan border, which is too viscous to flow through pipelines unless it is diluted with condensate.

An increasing number of Canadian producers are starting to transport heavy oil and raw bitumen in heated rail cars, to save on the cost of adding condensate.   Continued...