CALGARY – Canadian Pacific Railway (TSX:CP) is looking to tap into new oil markets with an expansion of its capacity to transport crude from the Saskatchewan portion of the Bakken formation that straddles the Canada-U.S border.
The Calgary-based company says increased volumes will move through a new CP loading facility in Estevan, Sask., to be operated by Bulk Plus Logistics. That will be in addition to loads already moving out of Dollard, Sask., at a connection with CP partner Great Western Railway.
Canadian Pacific is also investing more than $90 million to enhance capacity on its U.S. main line south of Saskatchewan, through North Dakota and into Minnesota.
The company says it’s using lessons learned in North Dakota, which shares a border with Saskatchewan and part of the Bakken formation. Shipments of crude from North Dakota have grown to 13,000 carloads this year from 500 in 2009.
“To move the crude by rail opportunities to the next level, CP will take what it has learned and the products developed in North Dakota and apply them in the emerging Saskatchewan and Alberta Bakken markets,” said Tracy Robinson, CP’s vice-president for energy and merchandise.
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“The model we developed in North Dakota is proven and we’re now bringing that north. To fully capitalize on these opportunities, CP has established a specialized Energy Development Team to proactively position CP’s products and capabilities in this rapidly emerging market place.”
Canadian oil producers have increasingly turned their attention to Asia and other emerging markets as the U.S. becomes a more difficult customer.
Major north-south pipelines in the planning stages have hit serious snags in recent months as environmentalists and landowners demand more protections. And some U.S. groups have called for oil from cleaner sources than that produced in the Western Canadian oilsands.
“The Bakken Formation represents significant growth opportunities for the people of Saskatchewan and those involved in the development of this emerging market,” Saskatchewan Energy and Resources Minster Bill Boyd said in the release from CP.
“I’m certain that CP’s experience and leadership in crude by rail transportation will prove effective in helping Saskatchewan producers with similar solutions, allowing them rapid entry into new markets.”
Canadian Pacific, which has this country’s second-largest railway, has a transportation network that spans most of Canada and stretches into the United States.
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