With pipeline capacity still relatively limited from the Canadian oil sands into the U.S, Houston’s USD Partners is expanding its terminal capacity in Oklahoma to offer more rail transportation access.
While rail transportation still is considered more dangerous than pipelines, rail car access offers oil companies more affordable transportation options from Canada when plans for new pipelines or expansions remain in the regulatory queue.
USD Partners, which went public in 2014, plans to take oil sands via rail from its Hardisty terminal in Alberta, Canada to its new terminal in Stroud, Okla., which is being acquired for just $25 million. From there, the oil would travel via pipelines to the Gulf Coast from the Cushing, Okla. storage hub.
“This transaction reinforces the strategic positioning of our Hardisty asset and confirms our long-held view that rail will continue as an important component of midstream transportation infrastructure in Western Canada,” said Jim Albertson, USD vice president of commercial development in Canada.
Several pipeline projects, although supported by President Donald Trump, from Canada to the U.S., such as TransCanada’s Keystone XL project, remain mired amid financial, regulatory and legal hurdles.
The Stroud terminal is located on 76 acres and includes 104 railcar spots, two 70,000 barrel storage tanks and one truck bay. Also, the terminal includes a 17-mile pipeline directly connected to the Cushing hub.