* Union Pacific sees 2011 petroleum shipments quadrupled
* Railroad sees continued rail opportunity for oil
NEW YORK, July 22 Union Pacific Corp (UNP.N),
the largest publicly held U.S. railroad, said it it expects to
quadruple the amount of oil it carries this year from the
Bakken shale formation in North Dakota to U.S. Gulf Coast
"We'll probably quadruple the amount this year in terms of
moving from the Bakken down to the St. James and elsewhere.
We're seeing just a lot of interest overall," said Jack
Koraleski, executive fice president of marketing and sales.
He said the company moved about 4,400 carloads of crude oil
out of Bakken Shale in 2010.
"We expect to move a little more than 16,000 carloads in
2011." he said, adding the railroad moved a total of 8.8
million carloads in 2010.
By rail, oil generally travels in batches of 60,000 barrels
or more on unit trains of 100 cars.
Prices of U.S. benchmark crude oil West Texas Intermediate
Clc1 touched record lows against other crudes as supplies
from Canada and the Bakken back up in the oil hub of Cushing,
Oklahoma due to lack of pipeline capacity to carry it to the
U.S. Gulf Coast for processing into gasoline and diesel.
The difference in price between WTI and global benchmark
North Sea Brent LCOc1 grew to over $23 a barrel earlier this
spring, and refiners scrambled for ways to take advantage of
the cheaper WTI price, turning to rail, barges and trucks to
"We're focusing exclusively on our own rail infrastructure
to support it, and everything that we see, even as pipelines
develop, tells us there's going to be a continued opportunity
for rail in this marketplace going forward for a long time," he
Earlier on Friday, the U.S. State Department said it
expects to issue a final environmental assessment on a key
pipeline - TransCanada Corp's (TRP.TO) proposed pipeline $7
billion pipeline - that would alleviate the backup of
inventories of crude in Cushing. [ID:nN1E76L0QK]
Koraleski said that with additional capacity coming on
stream from the Bakken and other plays like the Eagle Ford
shale oil in southern Texas, Union Pacific is looking to
develop additional capacity.
"One of the unique things that rail gives to customers is
the opportunity to go to various places and to play to the
extent they can the market advantages for themselves, so we see
a lot of interest in that," he said.
(Reporting by Janet McGurty and Lynn Adler; Editing by