Statoil transports US crude by rail

At the beginning of September Norway's Statoil starts transporting Bakken crude from North Dakota in the US to market by rail - significantly increasing the oil’s value.

Statoil plans to boost its North American production from less than 100,000 barrels oil equivalents per day (boepd) in 2011 to more than 500,000 boepd in 2020. An important part of the growth stems from the company's 2011 acquisition of holdings in the Bakken and Three Forks oil plays in North Dakota.

“The value of our Bakken crude is lowered by present limited pipeline capacity in the region. The ability to create sufficiently marketable products and ensure that we have enough transport capacity is increasingly important. Transporting the crude by rail bypasses the pipeline bottlenecks and ensures our products get to market and that we get the highest possible price,” says Tor Martin Anfinnsen, senior vice president of Crude, liquids and products in Statoil.

From the beginning of September, the oil starts traveling by rail, giving Statoil the option to reach customers on the US East, West and Gulf Coasts, and Canada.

Statoil says in a press release that the magnitude of the operations is best illustrated through the fleets of trains that will be transporting crude from Bakken.

From now and onwards, the logistic chain will be upscaled with unit trains totaling more than 1000 cars. The tank cars are on long-term lease and incorporate all the latest industry safety standards. The average length of a train with 100 tank cars is almost 2 kilometres.

Rail transit times to Canada, the US East Coast and Gulf of Mexico are approximately 14-15 days round trip, including loading and unloading.

“The ramp up of production from our onshore assets in North America grows rapidly. The rail solution supporting the Bakken business will increase the value of the oil significantly. This translates to substantial profits as production continues to grow,” says Torstein Hole, Statoil senior vice president US onshore in Statoil.

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