UP acquires Oklahoma-owned rail line

Yesterday, Union Pacific Railroad and the Oklahoma Department of Transportation announced the Class I acquired full ownership of a 351-mile, state-owned rail line that Oklahoma officials had saved decades ago by drafting a unique purchase agreement with a predecessor railroad.

The pact originally was drafted 30 years ago, when the Chicago, Rock Island and Pacific Railroad Co. filed for bankruptcy, potentially eliminating a key rail connection that linked Texas and Kansas through Oklahoma. The state purchased 351 miles of track running through Enid, El Reno, Oklahoma City, Chickasha, Duncan and Lawton that was operated by the Oklahoma-Kansas-Texas Railroad Co. through a 30-year-lease signed in November 1982. UP acquired the tracks after several mergers and finished paying $35 million, plus accrued interest, for the line last year.

"This type of agreement was unique, but we felt it was critical that we preserve the rail corridors and work towards getting them back in the hands of private industry," said Oklahoma Transportation Secretary Gary Ridley in a prepared statement.

UP maintains the line and operates trains carrying mixed goods through the area. The north-south line is favored by oil and gas companies operating in the Anadarko Basin that take delivery of trains carrying frac sand and pipe used in the hydraulic fracturing process, UP officials said.

The Class I operates 1,173 miles of track in Oklahoma, which serve as a vital link between the Midwest and Gulf Coast, they said.