More North American energy companies are turning to rail transport as an option to get crude oil to refineries because there isn't enough pipeline infrastructure in place to keep pace with the boom. Though cross-border options like Keystone XL are stuck in bureaucratic limbo, the intra-continent midstream sector is emerging as a good opportunity for energy players keen on nibbling at the margins of the region's oil bonanza.
Genesis Energy (NYSE: GEL) this week said it was looking to take advantage of the best of both worlds by exploring options to link the glut of North American oil to the rail sector. It said it was conducting an open season to see who was interested in a 70-mile pipeline network that would tie a Casper, Wyo., terminal to its existing Pronghorn train loading facility.
Pronghorn is the only facility of its kind in the region that's serviced both by BNSF Railway and Union Pacific Railroad.
Grant Sims, the company's chief executive officer, said the pipeline would offer crude oil shippers a cheaper and more efficient way to deliver their products from the state's Powder River basin, which Genesis says could be a premier and emerging play west of the Mississippi River.
"As Canadian volumes continue to increase over time, along with local production, Pronghorn is best positioned long?term to provide shippers with the flexibility to load trains and facilitate the movement of these barrels directly to the most attractive markets," he said.