Phillips 66 is ordering 2,000 rail cars to transport oil from shale fields in North Dakota to its refineries on the east and west coasts, the Financial Times reported on Friday.

The cars will cost the company $200 million and enable it to carry 120,000 bpd of oil from the central US, where it is cheaper, to the coasts.

“We’re going to add rail capacity,” said Phillips 66 CEO Greg Garland. “We’re considering buying a couple thousand more railcars so we can get Bakken crude either east or west.”

Garland said the plan is targeted for “the next year or two”. US oil companies have recently turned to rail, trucks and barges for crude shipments because of the lack of pipeline development in the region.

Phillips 66 currently refines about 100,000 bpd of shale oil but could handle as much as 500,000 bpd, Garland said.

"That's a pipeline on wheels,” said Garland. “So, that could go to the Bakken. It could go to the Niobrara. It can shift as the opportunity shifts around the country.”

Additional reporting by Dow Jones Newswires