A new crude-by-rail project could increase by more than half the amount of cheap, Canadian oil sands crude now reaching the U.S. petrochemical hub through western Canadian pipelines.
On Tuesday, railroad operator Kansas City Southern and oil logistics firm Global Partners said they’re planning to build a unit train terminal in Port Arthur, Texas, 90 miles east of Houston and within 100 miles of some of the nation’s biggest refineries.
More than 340,000 barrels of Canadian heavy oil could be stored at the terminal, but the companies say they could send up to two trains carrying a combined 120,000 barrels of oil per day, roughly the same amount Gulf Coast refiners currently unload from Canada via railways.
“Our expectation is that the facility in its initial phase will be capable of handling a couple unit trains per day,” said Mark Romaine, chief operating officer for Global Partners. “There are expansion possibilities.”
Unit trains can carry up to 34,500 gallons — about 260,000 pounds — of heavy crude on about 120 to 130 cars.
Global Partners operates other crude-by-rail destinations on the east and west coasts, but most of the crude moved there is light, sweet crude from the Bakken Shale in North Dakota. The firm has been looking to build out infrastructure in the Gulf Coast and meet demand for heavy crude, Romaine said.