EXCLUSIVE-BNSF to move into tank car ownership with safer oil fleet

Thu Feb 20, 2014 6:06pm EST
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* BNSF has boosted 2014 spending plan

* Shares of U.S. railcar makers surge

* Refiners replacing older railcars (Adds U.S. Secretary of Transportation comments)

By Kristen Hays and Cezary Podkul

HOUSTON/NEW YORK, Feb 20 (Reuters) - BNSF Railway Co plans to move into tank car ownership and buy its own fleet of up to 5,000 new crude oil tank cars with safety features that exceed the latest industry standards, the unit of investor Warren Buffett's Berkshire Hathaway Inc said on Thursday.

The unusual step by one of the largest U.S. railroads aims to reduce the risks of moving crude by rail after several recent accidents, including one involving a BNSF train in North Dakota in December.

The company, a major mover of crude by rail throughout the United States, plans to seek bids from railcar makers for up to 5,000 new tank cars with thicker walls and ends, increased protection of safety and pressure valves, and other features that go beyond industry standards adopted two years ago.

The news sent shares of several U.S. railcar makers higher.

Railroads like BNSF generally own only the tracks and locomotives that pull trains. Railcars are usually owned by leasing companies or firms such as refiners that sometimes buy cars for their own fleets. In some cases, shippers buy railcars, sell them to leasing companies, and then lease them back.   Continued...