A $100-million terminal is planned for Saskatchewan to move oil more quickly on the rail to ease transport issues with major pipeline projects coming up. These projects include TransCanada Corp.’s Keystone XL conduit to Texas refineries from Alberta,which are still in regulatory limbo.
“Two things happened at the same time – Bakken expansion and XL postponement. I mean, it was supposed to come on in 2012,” FirstEnergy Capital Corp. analyst Steven Paget said.
According to ARC Financial Corp., rail facilities with a total capacity of 708,000 barrels a day, about a quarter of Canada’s current overall oil output, have been planned to start between 2012 and 2015.
“It got delayed – delay after delay – and differentials caused shippers to realize that being exposed to that is a lot worse than committing to a couple of extra rail terminals,” Mr. Paget said.