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Rail News: Shippers

Plans advance for several rail-served facilities


Farmer-owned cooperative and global agriculture and energy firm CHS Inc. has announced plans to proceed with construction of a $3 billion fertilizer manufacturing plant in Spiritwood, N.D.

CHS' board recently approved final plans for the facility, which will be served by BNSF Railway Co. A groundbreaking will be held later this year, with the plant to be fully operational in first-half 2018, CHS officials said in a press release.

The plant each day is expected to produce more than 2,400 tons of ammonia, which will be converted to urea, diesel exhaust fuel and other products. The majority of the nitrogen products would serve farmer-owned cooperatives and independent farm supply retailers within a 200-mile radius of the plant in portions of North and South Dakota, Minnesota, Montana and Canada.

"[We're] taking an important, strategic step on behalf of [our] member-owners by ensuring them a reliable domestic supply of nitrogen fertilizers essential to help farmers raise healthy, profitable crops to feed a growing global population," said President and Chief Executive Officer Carl Casale.

CHS first announced plans to build a fertilizer manufacturing plant in the area in September 2012, but in April the company postponed a final decision when construction and labor costs exceeded initial estimates.

"Because of the size and scale of this investment, we needed to take the additional time to review costs and reassess areas where we could make modifications," said Casale.

BNSF also will serve a fertilizer warehouse in Hamberg, N.D., that CHS is building with Fessenden Cooperative Association under a joint venture. The facility is slated to open in fall 2015.

Meanwhile, U.S. Silica Holdings Inc. has announced plans to add about 3.8 million tons of new capacity at two facilities to meet surging demand for northern white frac sand.

The company will expand its Pacific, Mo., plant and develop a frac sand mine in Wisconsin. The $33 million Missouri project includes a new transload facility to support additional volumes. To come online in third-quarter 2015, the plant has access to both BNSF and Union Pacific Railroad, and is near the Eagle Ford Shale and Permian Basin, which helps lower freight costs, U.S. Silica officials said in a press release.

The company also has started to develop a 3 million ton-per-year frac sand mine/plant and associated in-basin transload facilities in Wisconsin. Scheduled to open in mid-2016, the $150 million facility will be located "on a highly-desirable Class I railroad," U.S. Silica officials said.

"We believe that a step change is occurring with regard to the volumes of sand being used per well, which translates into significant demand for our products," said U.S. Silica President and CEO Bryan Shinn.

In California, Alon USA Energy Inc. announced it received approval from the Kern County Board of Supervisors to construct a crude-by-rail facility at a Bakersfield refinery and make modifications to process light crude.

The company plans to build a double rail loop to accommodate two BNSF unit trains per day. Construction of the rail facility is expected to be completed by 2015's end.

"With this approval in hand, we are ready to start detailed engineering," said Alon President and CEO Paul Eisman in a press release.

In Ohio, Esmark Inc. announced plans to convert a steel finishing mill in Yorkville into a tri-modal industrial services terminal to support companies engaged in oil and gas exploration and production in the Marcellus and Utica shales

The 1 million-square-foot Yorkville Energy Services Terminal will serve as a rail/truck/barge logistics and transportation hub serving Pennsylvania, Ohio and West Virginia, Esmark officials said in a press release. Rail access will be provided by Norfolk Southern Railway and the Wheeling & Lake Erie Railway Co. via 13 internal rail spurs.

Conversion and initial retrofitting of the facility's infrastructure already is under way. A number of large and mid-sized energy services companies are interested in locating at the terminal, including companies engaged in materials handling and transloading, rail switching and stowage, and chemical storage and forwarding, Esmark officials said.

"We believed the idled facility was ideally suited to serve companies engaged in oil and gas exploration and production," said James Bouchard, Esmark's founder, chairman and CEO. "With its on-site rail, truck and barge access and complementary heavy equipment, Yorkville Energy Services Terminal offers companies a fully integrated logistics and transportation solution."

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