OmniTRAX Canada suspends crude shipments; several U.S. firms enhance crude-by-rail capabilities

OmniTRAX Canada Inc. yesterday announced plans to focus on grain and suspend crude-oil shipments in anticipation of a record shipping season at the Port of Churchill, Manitoba, in 2014.

New customers and contracts to ship grain, commodities, and building and construction materials to Nunavut, Canada, prompted the business decision, OmniTRAX Canada officials said in a press release.

"OmniTRAX’s vision has always been to run a viable business that meets the needs of Northern Manitoba and Northern Canada. Our decision to suspend crude by rail was based in part that grain shippers were willing to commit long-term orders in contracts of over 700,000 metric tons due to the market’s overall growth," said OmniTRAX Canada President Merv Tweed. "Following last year’s record crop, we’re preparing for another strong shipping season."

The company consulted with officials from First Nations, Metis and the provincial government prior to deciding whether to suspend crude shipments. OmniTRAX Canada will continue to diversify the commodities it currently handles through the port — including potash, feed and wood pellets — to ensure its long-term sustainability, said Tweed.

Meanwhile, Atlas Oil Co. yesterday announced it opened a transloading facility in Evans, Colo. The company's fourth transload terminal initially will serve the crude-oil market, but also is designed to handle fuels, lubes and other oil-field materials.

The facility will be served by Union Pacific Railroad and handle crude produced in the Niobrara Shale. Atlas Oil also operates transload facilities in Albuquerque, N.M., and La Feria and Monahans, Texas.

"We plan to start shipping single cars of crude while developing a strategy to expand to unit-train shipments as the basin grows," said Atlas Oil Director of Business Development Scott Swanson in a press release.

In North Dakota, Dakota Plains Holdings Inc. and Hiland Crude L.L.C. have executed an interconnection agreement that will link Dakota Plains' Pioneer Rail Terminal in New Town with Hiland's crude-oil pipeline network.

Construction on the final pipeline link is under way and expected to be commissioned by October's end. Hiland's network is the largest in the Bakken Shale, traversing portions of North Dakota and Montana, Dakota Plains and Hiland officials said in a press release.

The connection to the Pioneer Rail Terminal — which is served by Canadian Pacific and launched unit-train operations in February — is expected to generate an initial capacity of over 15,000 barrels per day. Capacity eventually could be expanded to about 60,000 barrels per day, Dakota Plains and Hiland officials said.
 
"In connecting to the Pioneer Terminal on the Canadian Pacific network, we can now offer our clients access to every market outlet in the Bakken," said Hiland Senior Vice President of Crude Jim Suttle.