The Canadian National Railway in November will start service to a new transloading facility in Grand Prairie, Alberta, being built by Di-Corp to supply specialty sand for the oil and gas industry.
The sand is injected at high pressure along with water and certain chemicals into shale rock formations in a process known as hydraulic fracturing. The new technology, along with new horizontal drilling techniques, has opened up vast fossil fuel fields across the United States to exploration and drilling. Major fields are being tapped in North Dakota and Montana (the Bakken Field), Texas, Pennsylvania and other states.
Railroads are already experiencing rapid growth in their liquid bulk operations transporting oil from fields that lack much pipeline capacity, although oil is still a tiny percentage of their overall business at this point. They are also hauling pipe, sand and other materials to drilling sites.
The 20-acre facility being built by Edmonton-based Di-Corp, a supplier of parts and materials for the drilling industry, will have an annual capacity of 550,000 tons of frac sand and have three tracks capable of holding 44 rail cars for unloading.
"The new transloading terminal will create additional offloading and storage capacity at destination and also give our origin frac sand producers in the U.S. Midwest, Manitoba and elsewhere greater supply chain efficiencies and new market opportunities," Doug MacDonald, CN's vice president for industrial products, said in a statement.
CN is investing significantly in its frac sand franchise. CN announced last month it was accelerating work on the $33 million-upgrading of a 74-mile rail line between Wisconsin Rapids and Blair, Wis., to increase car-loading capacity and train velocity for growing frac sand supply chains. In 2012, CN spent $35 million to restore a 40-mile rail line between Ladysmith and Poskin, Wis., to serve the frac sand market.
Analysis about the role railroads are playing in the North American oil boom can be found in the January magazine feature "Steel-wheeled Pipeline
." - Eric Kulisch