Exclusive: BNSF taking bids to buy up to 5,000 safer oil railcars

HOUSTON Thu Feb 20, 2014 9:22am EST

1 of 2. A aerial image shows a train entering a depot along the Burlington Northern Santa Fe (BNSF) rail line outside of Williston, North Dakota March 12, 2013.

Credit: Reuters/Shannon Stapleton

HOUSTON (Reuters) - BNSF Railway Co aims to buy its own fleet of up to 5,000 new crude oil tank cars with safety features that exceed the latest standards adopted by the industry more than two years ago, the company confirmed on Thursday.

The unusual step is intended to further the industry's push for safer movement of crude by rail in light of several derailments and crashes in recent months, including one involving a BNSF train in North Dakota last December.

The railroad, owned by Warren Buffett's Berkshire Hathaway (BRKa.N) and a major mover of crude by rail throughout the U.S., plans to seek bids from railcar makers for tank cars with more safety features than those that already meet stronger industry standards, such as thicker walls, thicker ends and more protection of safety and pressure valves.

BNSF's plan is atypical for a railroad, which generally own only the tracks and locomotives that pull trains. Railcars are usually owned by companies that lease them to shippers, or shippers like refiners Phillips 66 (PSX.N) and PBF Energy (PBF.N) that buy their own cars as well as lease.

BNSF declined to comment on possible pricing to shippers who opt to use the railroad's tank cars once they're built, saying such information is proprietary. Other U.S. railroads also declined comment last week on the Canadian railroads' decision to charge shippers more for using older tank cars.

The December crash of a BNSF crude train in North Dakota involved railcars that don't meet current industry safety standards, according to investigators. The train crashed into a derailed grain train, setting off fires that burned for more than a day. No one was hurt.

(Reporting By Kristen Hays; Editing by Terry Wade)

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