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10/8/2012



Rail News: Rail Industry Trends

Global Partners, U.S. Silica land rail-related business deals in shales


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Global Partners L.P. has signed a purchase agreement to acquire a 60 percent interest in Basin Transload L.L.C. for about $80 million. Basin Transload operates two transloading facilities in the Bakken Shale region in North Dakota that sport a combined daily rail loading capacity of 160,000 barrels.

A Columbus, N.D., facility is located along a Canadian Pacific line and provides rail service to Global Partners' recently expanded terminal in Albany, N.Y.; a Beulah, N.D., facility supports crude-oil production in the Williston Basin and is located along a BNSF Railway Co. line.

"The acquisition of a majority stake in Basin Transload significantly broadens and strengthens our energy infrastructure in the Bakken region," said Eric Slifka, Global Partners' president and chief executive officer, in a prepared statement. "The dramatic growth in Bakken crude-oil production and related rail transport is another key component in Global's diversification strategy. Our recently completed Albany rail expansion … serves as a 'virtual pipeline' to transport crude and other products from the mid-continent region to Albany, directly addressing the lack of pipeline infrastructure on the East Coast."

Meanwhile, U.S. Silica Holdings Inc. reached an agreement with S.H. Bell Co. to open a new silica sand storage facility to support growing frac sand demand in the Utica and Marcellus shales. U.S. Silica will ship barges and rail cars of premium Northern White frac sand to a new transload facility in East Liverpool, Ohio, from its network of sand plants.

"This is a prime location for a new facility," said U.S. Silica Chief Executive Officer Bryan Shinn in a prepared statement. "We have opened nine strategic frac sand transload facilities this year and continue to move our point of sale closer to the shale basins."


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