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Rail News: Rail Industry Trends

Four noteworthy developments impact ethanol, crude-related rail facilities

Biofuel supply chain company Eco-Energy yesterday announced plans to develop an ethanol unloading, storage and outbound truck loading facility in Augusta, Ga., that will be served by Norfolk Southern Railway.

The facility will be equipped to receive up to 80 tank cars via NS for distribution by truck to local gasoline blending facilities. Unit train operations are expected to begin in December.

Designed to serve the Augusta and Savannah markets, the facility also will feature 3.7 million gallons of dedicated ethanol storage capacity to empty an inbound train and release it back to the railroad within 24 hours.

"We feel the industry will benefit from a unit-train operation in this growing market," said Eco-Energy Vice President of Distribution Chadwick Conn in a press release.

In Illinois, Aventine Renewable Energy recently marked the completion of a $13.2 million project aimed at upgrading its ethanol plant in Pekin.

The company replaced three 70-year-old coal boilers with two high-pressure natural gas boilers. As a cogeneration facility, the plant produces high-pressure steam that's used to generate electricity and low-pressure steam that's used in corn wet-milling process.

Aventine Renewable Energy also is building a new truck and rail dump to enable the plant to unload 60,000 bushels of corn per hour, or unload 110-car BNSF Railway Co. shuttle trains in less than 15 hours.

"Ag processing plants must be rebuilt every 20 years, so we are rebuilding the Pekin wet mill to be productive for another 20 years," said Aventine Renewable Energy President and Chief Executive Officer Mark Beemer in a press release.

In New Mexico, Rangeland Energy will provide Halliburton frac sand rail unloading, storage and distribution services in the Delaware Basin per a new multi-year agreement. Rangeland will provide the services from its RIO Hub that's under construction near Loving, N.M.

Operations are expected to begin in October at the 300-acre RIO facility, which will be served by BNSF. In addition to serving Halliburton’s regional frac sand requirements, the hub will offer crude oil and condensate storage, stabilization and outbound rail transportation services via BNSF, and be connected to a pipeline network in Midland, Texas, Rangeland officials said in a press release.

By offering outbound service via rail and pipeline from the hub, refiners, marketers and area producers have several infrastructure options to reach multiple markets from southeast New Mexico and west Texas, they said.

Meanwhile, USD Group L.L.C. has formed wholly owned subsidiary USD Partners L.P. (UDSP) and filed with the U.S. Securities and Exchange Commission to conduct an initial public offering (IPO) of common USDP stock.

Headquartered in Houston, USDP will acquire, develop and operate energy-related rail terminals and other midstream infrastructure assets, USD Group officials said in a press release. The subsidiary's initial assets will include an origination crude-by-rail terminal in Hardisty, Alberta, that can load up to two 120-car unit trains per day; two unit train-capable ethanol rail terminals in San Antonio, Texas, and West Colton, Calif., that have a combined daily capacity of 33,000 barrels; and a rail-car fleet numbering 3,799 cars as of Aug. 1.

The common stock is expected to trade sometime later this year on the New York Stock Exchange under the ticker symbol "USDP." The number of shares to be offered through the IPO and the price range haven't been determined.

Contact Progressive Railroading editorial staff.

More News from 9/4/2014