News - International Rail News

Also in the news

Lucky escape for workers from runaway rail transporters

in International Rail News Thursday, 6 November

What Old Transit Maps Can Teach Us About a City's Future

in International Rail News Wednesday, 15 October

Eurostar unveils new 200mph Channel Tunnel train

in International Rail News Friday, 14 November

Laos rail development on fast track with Thailand, China line

in International Rail News Thursday, 13 November

How Costs Soared at the $4 Billion Train Station for the World Trade Center

in International Rail News Wednesday, 3 December

Share this article

Viewed 510 times since Sunday

Alberta bitumen makes it to Mississippi by rail

Updated Tuesday, 8 January, 2013

EDMONTON - The first oil from Southern Pacific Resource Corp.’s startup thermal oilsands facility near Fort McMurray reached Mississippi by rail this week after a 4,500-kilometre, two-week journey.

The Calgary-based firm was in the news this fall when it announced it would avoid the bitumen pipeline bottlenecks and very low prices being paid to Canadian oilsands producers by contracting for new terminals and a fleet of rail cars to carry its product to the U.S. Gulf Coast.

The first shipment of diluted bitumen left the Lynton rail terminal, located just south of Fort McMurray, on Dec. 22 and landed in Mississippi on Jan. 6. It will be off-loaded at the Genesis Natchez terminal where Southern Pacific has exclusive terminal capacity, the company announced Monday.

Initial production at the firm’s steam-assisted gravity drainage (SAGD) facility 45 km northwest of Fort McMurray was 1,200 barrels per day in December. It could take at least another year before the design capacity of 12,000 bpd is achieved.

Southern Pacific plans to build inventory in Natchez for most of January before it begins sales of its dilbit, which will be loaded onto barges and taken a short distance downriver to one of the eight refineries in Louisiana where it will receive pricing competitive with other U.S. Gulf Coast heavy oil imports. That price will be about $110 per barrel, more than double the current bitumen price for Canadian heavy crude.

Southern Pacific estimates it will pay $31 a barrel to move its product to a Louisiana refinery compared with $8 for pipeline shipping if that was available. It will also haul diluent — the bitumen thinner which is much cheaper in the U.S. — in the returning cars for its own use, which will defray some of its shipping costs.

The first diluent delivery is expected on Jan. 21 when the rail cars return.

Under the contract with Altex, CN and Genesis Energy in the U.S., more than 12,000 carloads each year will be heading to Mississippi in the 500 rail cars Southern Pacific has leased. This would equal about 10 crude unit trains per month on a two-week return trip. The CN line runs through the Edmonton region.