April 16, 2013 / 7:00 PM / 6 years ago

Enbridge, Tundra to build Manitoba rail oil terminal

The Enbridge Tower is pictured on Jasper Avenue in Edmonton August 4, 2012. REUTERS/Dan Riedlhuber

CALGARY, Alberta (Reuters) - Tundra Energy Marketing Ltd said on Tuesday it and Enbridge Inc, Canada’s No.1 pipeline company, will build a rail terminal near Cromer, Manitoba, capable of handling up to 60,000 barrels per day of oil.

Privately held Tundra said it and Enbridge have signed a memorandum of understanding to jointly develop the rail-loading terminal, which will take crude from Manitoba, Saskatchewan and North Dakota, and connect with Enbridge’s pipeline network in the region, which delivers oil to refiners in Ontario and the U.S. Midwest.

There has been a rapid increase in rail transport of crude in the last three years as booming North American oil production has outgrown existing pipeline capacity.

Around 40,000 barrels per day (bpd) on average were shipped to the United States in 2012, according to data from Canada’s National Energy Board.

The terminal will be built in two 30,000 bpd phases. The first phase is already under construction by Tundra and will open by July 1 while the second will be completed in the first quarter of next year.

Reporting by Scott Haggett; Editing by Bob Burgdorfer

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