Aug 18 (Reuters) - Oil transportation company Dakota Plains Holdings Inc said it would link its Pioneer Rail Terminal in North Dakota to Hiland Partners LP's pipeline carrying crude out of the Bakken shale formation.
Oil by rail has surged in recent years as a production boom in North Dakota outpaced pipeline capacity.
The connection to the Pioneer Terminal is expected to have an initial capacity of more than 15,000 barrels a day and can be expanded to about 60,000 barrels of oil per day, the companies said.
The link is expected to be commissioned by Oct. 31, giving Hiland's Market Center Gathering System pipeline access to Canadian Pacific Railway line.
Hiland Partners is a privately held midstream company chaired by Continental Resources Inc Chief Executive Harold Hamm.
"The Hiland pipeline is an important link to the western area of the Williston Basin, effectively expanding our supply radius to enable cost effective delivery of oil to the Pioneer Terminal," Dakota Plains Chief Executive Craig McKenzie said. (Reporting by Anannya Pramanick in Bangalore; Editing by Don Sebastian)