TransCanada Corp. says it will likely begin shipping Canadian crude oil by rail.
Shawn Howard, a spokesperson for the Canadian pipeline company, said negotiations are underway with customers who are looking for ways to move crude using alternate modes of transportation.
Until now, TransCanada has shipped crude exclusively through pipelines.
Delays in pipeline approvals have prompted the company and its competitors to look for other ways to move product into the U.S. market.
Rail is the most obvious option.
“Our customers prefer to move larger volumes of oil by (pipeline) because it’s more efficient, its safer and it produces fewer emission … but in the absence of (pipeline) approvals, they are moving the product using other means,” Howard said Feb. 5.
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Howard declined to offer specifics on how much crude TransCanada might move by rail or when rail shipments might begin, but he confirmed that discussions are underway with customers.
New transload facilities are being considered at an undisclosed number of western Canadian locations, he added.
TransCanada has crude oil storage facilities in Hardisty, Alta., near Edmonton. The majority of the oil it handles is piped to Nebraska, Illinois, Oklahoma and Texas.
Russ Girling, president of the Calgary-based pipeline operator, told an audience in Toronto recently that the amount of crude oil being shipped by rail has increased significantly.
Girling was quoted in the Financial Post Feb. 4 as saying that the industry is now “approaching 1.2 million barrels per day of (rail) loading capacity.”
“Nobody has waited for the Keystone XL pipeline to get built,” he said.
“Depending on our conversations, we will probably enter the rail business in some form or fashion in the coming months.”
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