Statoil leases more than 1,000 railroad cars to carry Bakken crude

Statoil ASA said it has leased more than 1,000 railroad cars and plans to transport crude oil from the Bakken formation to refineries on the US East Coast and Gulf of Mexico and to Canada. Rail shipments are expected to start during September.

“The value of our Bakken crude is lowered by present limited pipeline capacity in the region,” said Tor Martin Anfinnsen, Statoil senior vice-president of crude, liquids, and products. “Transporting the crude by rail bypasses the pipeline bottlenecks and ensures our products get to market, and that we get the highest possible price.”

Statoil plans to boost its North American production to more than 500,000 boe/d in 2020 from less than 100,000 boe/d in 2011. Some of the anticipated growth is expected to come from the Bakken and Three Forks plays, where Statoil acquired holdings with its 2011 acquisition of Brigham Exploration (OGJ Online, Oct. 17, 2011).

Statoil said it has long-term leases for the tank cars, giving it the capacity to move 45,000 b/d of crude. Estimated rail times to Canada, the US East Coast and gulf coast are 14-15 days round trip, including loading and unloading.

Other companies also move or plan to move Bakken crude by rail. These include EOG Resources Inc., Marathon, Enbridge Energy Partners LP, Phillips 66, and Tesoro Corp.

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