Canadian National Railway Co. (CNR.TO) and Canadian Pacific
Railway Ltd. (CP.TO), the country's No. 1 and 2 carriers, are
rushing to build terminals to load oil beyond the reach of
pipelines in some of North America's remotest regions, Bloomberg
Canadian National is in talks to build more oil terminals after
an agreement last month to construct a facility serving Manitoba
and Saskatchewan, Chief Executive Officer Claude Mongeau said in an
interview. "Rapid-deployment terminals" as little as a tenth of
that size also are in the works, he said
Cargo from Alberta's oil sands is buoying Canadian National
while Canadian Pacific (
) benefits from tracks serving North Dakotaâs Bakken Shale
formation. Canadian Pacific opened a rail hub in the state this
year and is investing $90 million to upgrade a
"Crude by rail is becoming a reality," said Walter Spracklin, a
transportation analyst at RBC Capital Markets in Toronto. "Before,
it was a theory."
Rail transport of crude in North America has jumped by about
360,000 barrels a day in the past year -- the equivalent of adding
a "major" pipeline, according to Steven Paget, an analyst at
FirstEnergy Capital Corp. in Calgary. Those shipments have soared
as community protests slow new pipelines and oil finds occur
outside the current pipe network.
As recently as two years ago, Canadian National didn't haul any
crude. Now it projects moving about 30,000 oil carloads in 2012.
Petroleum and chemicals produced 16% of the Montreal-based
railroad's $7.4 billion in revenue in 2012's first nine months.
Canadian Pacific predicts reaching an annual rate of 70,000
oil-tank cars by early 2013, after running only about 500 such
loads in North Dakota in 2009. Through three quarters this year,
the Calgary-based carrier got 22% of its $4.2 billion in sales from
the industrial and consumer products category, which includes oil