Exxon to move Canadian crude by rail amid pipeline shortage

HOUSTON — With limited pipeline options to ship oil sands crude out of Canada, Exxon Mobil Corp. plans to move up to 100,000 barrels per day of Canadian oil using a new rail terminal that should be running by 2015, an executive said Thursday.

The terminal, to be constructed in Alberta, will cost up to $250 million if it is built to a maximum capacity of 250,000 barrels of oil per day, said David Rosenthal, Exxon Mobil’s vice president of investor relations, during a conference call with analysts.

Keystone XL: TransCanada will look at rail if pipeline is rejected

The rail terminal is being developed by Kinder Morgan and Imperial Oil at an initial cost of $170 million. Exxon Mobil has a 70 percent ownership stake in Imperial Oil.

“We’re looking at utilizing initially about 100,000 barrels a day to move our expanded production into the market,” Rosenthal said.

Exxon Mobil continues to evaluate options to move oil by rail, pipeline and barge, he said.

“It’s all about optionally flexibility and being able to take advantage of spreads and options to maximize the overall value,” Rosenthal said.

A number of recent oil train derailments and explosions have raised public concerns about the safety of moving crude by rail.

Also on FuelFix:

Crude oil will continue rolling by train