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Rail News: Logistics

Canadian, U.S. firms seek to expand rail capacity for crude oil business


Yesterday, G Seven Generations Ltd. announced plans to build a rail line to transport oil from the Alberta oil sands in Canada to an existing marine oil terminal in Valdez, Alaska.

According to one option under consideration, the more than 1,200-mile line would run northwest from Fort McMurray, Alberta, to link with the Alyeska Pipeline in Delta Junction, Alaska. The project's first phase is estimated to cost about $12 billion.

“Studies have already demonstrated that a rail link to Alaska is a viable alternative to the oil pipelines currently being planned through British Columbia,” said G Seven Generations Director Matt Vickers in a prepared statement. “Diversifying markets for Canadian oil is an important challenge, but we need to achieve this goal in the most environmentally and socially responsible way possible.”

Over the next few months, G Seven Generations plans to complete the project's feasibility study and a business plan.

Meanwhile, U.S. Development Group L.L.C. (USDG) announced plans to expand its St. James, La., rail terminal, which handles and distributes crude oil and related products, and is served by Union Pacific Railroad. To be completed by the fourth quarter, the expansion calls for doubling the terminal’s daily capacity to 130,000 barrels, or two unit trains. USDG plans to add seven miles of track and an automated 52-spot rail-car offloading rack at the terminal.

“Since beginning operations in summer 2010, our St. James terminal has experienced strong demand from producers and marketers looking to obtain the best value for their oil,” said USDG Vice President Mike Day in a prepared statement.

The company plans to construct five facilities similar to the St. James terminal within the next 18 months to extend its crude oil rail network, USDG officials said. The network would obtain capacity to handle higher rail volumes of oil and condensate from the Bakken and Eagle Ford shales, and other major North American production areas, they said.

Contact Progressive Railroading editorial staff.

More News from 6/30/2011