SupplyChain Magazine October 2014 | Page 11

FEATURE ARTICLE SHORTENED HEADLINE
Rail makes sense as the main pipeline alternative another matter .
Considering the gooey consistency of Canada ’ s pure bitumen , rail makes sense as the main pipeline alternative . Rail transport doesn ’ t require dilution prior to shipping , as it does in pipeline transport ; so shipping bitumen in its pure form would require fewer barrels .
That creates an incremental netback on rail transport of about $ 6 per barrel , compared to pipeline processing . Recent disasters such as the derailment in Lac-Megantic , Quebec , however , have attracted public outcry in both countries for tighter controls . This means more regulation is likely , with stiffer compliance for all parties participating in the energy commodity supply chain .
Despite those concerns , the Keystone delay has spurred producers to start shipping Canadian crude by truck , rail or barge . TransCanada , a major energy company based in Calgary , Alberta , has plans to build rail terminals in Alberta and Oklahoma . Exxon Mobil is also planning a new Canadian rail terminal , set for operation in 2015 at a cost of about $ 250 million . Its completion would accommodate shipments of nearly 100,000 barrels per day .
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