BNSF expands Bakken US oil rail capacity by 25%

By BEN LEFEBVRE

BNSF Railway Co. said it has expanded its rail capacity out of North Dakota and Montana to be able to haul up to 1 million bpd of oil out of the Bakken shale formation, illustrating the breakneck pace of US domestic crude production.

The private railway company said Tuesday its $197 million investment has increased rail capacity out of the Bakken by 25% over the past year.

The expansion will help oil producers move their oil to market. Advances in drilling technology have unlocked oil and natural gas from shale formations and caused US oil production to surge past the capacity of the country's pipeline system to handle it.

The boom in oil production has caused a parallel increase in railway use. Tesoro, Phillips 66 and Statoil have all purchased rail cars - and in Tesoro's case, built rail lines - to move oil from increasingly productive US fields.

BNSF said its investment will allow it to expand train sizes to up to 118 tank cars from 100, hire 560 new employees in North Dakota and Montana, build two new terminals and replace 121 miles of rail.

BNSF said it expects this year to haul 88.9 million bbl of oil out of the Williston Basin, the geographic area encompassing the Bakken region, up from 1.3 million bbl in 2008.


Dow Jones Newswires

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