Company plans more rail service for Canadian oil
Houston’s USD Partners, a Houston logistics company, is expanding its terminal capacity in Oklahoma to accommodate more rail service from Canadian oil sands as pipeline construction lags.
Pipeline capacity from Alberta is strained and new pipelines are likely years away, meaning oil companies will need to move oil south to refineries by rail cars, which are considered more dangerous than pipelines.
USD Partners, which became a publicly traded company in 2014, plans to take more oil sands via rail from its Hardisty terminal in Alberta to its new terminal in Stroud, Okla. From there, the oil would travel via pipelines to the Gulf Coast from the Cushing, Okla., storage hub.
“This transaction reinforces the strategic positioning of our Hardisty asset and confirms our long-held view that rail will continue as an important component of midstream transportation infrastructure in Western Canada,” said Jim Albertson, USD vice president of commercial development in Canada.
Several pipeline projects are planned but face financial, regulatory and legal hurdles before they can be completed. President Donald Trump, reversing his predecessor, Barack Obama, earlier this year revived the Keystone XL pipeline, but a spokesman said that the route still needs approval and the earliest construction could start would be next year.
The Stroud terminal includes a 17-mile pipeline to Cushing.