CN Rail, Arc to build Alabama oil unloading terminal

TORONTO (Reuters) - Arc Terminals LP said on Monday it is working with Canadian National Railway CNR.TO to build a rail tank-car unloading terminal in Mobile, Alabama, for Canadian oil shipments destined for Gulf Coast refineries.

The facility, scheduled to begin operations in June 2013, is expected to initially handle 40 tank cars of Western Canadian heavy and Bakken light crude oil daily. It will have a maximum capacity of 75,000 barrels, or 120 tank cars, a day.

The terminal will also load condensate into the tank cars for backhaul by CN, Canada’s largest rail carrier, to Western Canadian oil producers.

Financial terms of the deal were not disclosed, nor did the companies say how they will work together to build the terminal.

“The rail transload terminal will handle heavy crude oil from Western Canada and light crude oil from the Bakken basin via CN, which will provide Canadian producers single-haul service to our Mobile destination,” said Arc Terminals President John Blanchard.

Arc Terminals owns and operates 11 petroleum product terminals in the United States with a combined capacity of about 3.6 million barrels.

Arc Terminals said that a new pipeline will connect the facility to its Blakely tank farm, a terminal with a storage capacity of 700,000 barrels for crude, fuel oil and asphalt. It did not say whether the new pipeline was part of the terminal project.

“CN is focused on making its crude-oil customers more competitive,” said CN’s Chief Marketing Officer Jean-Jacques Ruest.

“We expect to move in excess of 30,000 carloads (of crude oil) in 2012, and we believe we have the scope to double this business next year.”

Reporting By Susan Taylor; editing by Carol Bishopric