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Crude oil market: CN to build Alabama unloading facility with Arc Terminals; Inergy to acquire Rangeland's BNSF-served facility in Bakken


Yesterday, CN announced it's working with Arc Terminals L.P. to build a tank car unloading terminal in Mobile, Ala., to handle heavy crude oil shipped from western Canadian and light crude destined to Gulf Coast refineries.

The facility, which will have a maximum handling capacity of 75,000 barrels or up to 120 tank cars per day, is scheduled to begin operation by June 2013. Initial daily volume is expected to be 40 tank cars of crude oil; capacity will be increased according to demand, CN officials said in a prepared statement.

The facility, which will be the first tank car crude-oil unloading terminal in Alabama, will accommodate a quick car turnaround to increase product delivery, said Arc Terminals President John Blanchard.

"The rail transload terminal will … provide Canadian producers single-haul service to our Mobile destination," he said. "A single-line haul is more efficient and less expensive than those involving two or more rail carriers and multiple terminal switching."

The terminal also will be used to load condensate into tank cars for backhaul by CN to western Canadian oil producers, and will accommodate both general-purpose and insulated/coiled cars.

"Crude oil by rail is one of CN's fastest growing businesses. We expect to move in excess of 30,000 carloads in 2012, and we believe we have the scope to double this business next year," said Jean-Jacques Ruest, CN's executive vice president and chief marketing officer.

Meanwhile, Rangeland Energy L.L.C. announced yesterday that it entered into a definitive agreement with Inergy Midstream L.P. to acquire Rangeland for $425 million. The transaction is expected to close in early December.

Rangeland owns and operates the COLT system, an open-access crude oil distribution hub in the Bakken Shale in North Dakota. The system includes the COLT Hub, a large crude oil rail loading terminal in Williams County that's served by BNSF Railway Co., the COLT Connector and Dry Fork Terminal.

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More News from 11/6/2012