An oilsands facility seen from a helicopter near Fort McMurray, Alta., on July 10, 2012. Partners building Western Canada’s first diluent recovery unit project to allow more oilsands shipping by rail from Alberta say the merger of Canadian Pacific Railway Ltd. and U.S. rival Kansas City Southern gives their project a shot in the arm. THE CANADIAN PRESS/Jeff McIntosh

An oilsands facility seen from a helicopter near Fort McMurray, Alta., on July 10, 2012. Partners building Western Canada’s first diluent recovery unit project to allow more oilsands shipping by rail from Alberta say the merger of Canadian Pacific Railway Ltd. and U.S. rival Kansas City Southern gives their project a shot in the arm. THE CANADIAN PRESS/Jeff McIntosh

CP Rail/KCS rail merger to unite loading and unloading links for bitumen transport

Initial 50,000-barrel-per-day phase of the DRU and the Texas terminal are expected to be in service later this year

A partner in a project designed to allow more oilsands bitumen to be shipped by rail from Canada to the U.S. says the US$25-billion merger of Canadian Pacific Railway Ltd. and U.S. rival Kansas City Southern promises to provide additional benefits.

Jim Albertson, senior vice-president of the Canadian business unit for Houston-based USD Group, says CP Rail and KCS have been “instrumental” in moving forward Western Canada’s first diluent recovery unit (DRU) now under construction at Hardisty in east central Alberta.

Although most of Western Canada’s crude-by-rail is shipped by Canadian National Railway Co. because its east-west main line runs through Edmonton and is closer to the oilsands of northern Alberta, CP Rail connects with an oil-loading terminal operated by USD Group and its DRU partner, Calgary-based Gibson Energy Inc., at Hardisty.

In conjunction with the DRU project, USD Group is building a new oil unloading terminal at Port Arthur, Texas, to receive and distribute the Canadian oil or “DRUbit” — with the terminal served by a KCS rail line.

Diluent is light oil which is mixed with sticky, heavy bitumen from the oilsands to allow it to flow in a pipeline. It makes up as much as a third of the volume of blended bitumen so reducing diluent increases bitumen export capacity.

The Gibson-USD Group project is designed to remove most of the diluent from oil transported by pipeline to Hardisty, allowing transfer of the concentrated heavy crude to railcars for shipping south, while the diluent can be recycled back to Alberta oilsands producers.

The initial 50,000-barrel-per-day phase of the DRU and the Texas terminal are expected to be in service later this year, while the rail merger is expected to close, if it gets shareholder and regulatory approvals, in mid-2022.

“Both Canadian Pacific and Kansas City Southern were instrumental in making the diluent recovery unit and DRUbit-by-rail (DBR) a reality,” said Albertson in an email.

“We fully expect that the combination of the two railroads will only strengthen their support for this new source of bitumen, which offers operational, safety and environmental benefits when compared with available alternatives.

“A unified network with a single DBR carrier should result in additional benefits to all parties, both now and in the future.”

The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Most categories of crime held steady from year to year in Cumberland. File photo
Cumberland crime numbers hold steady year to year

A few categories had notable changes but many were similar to 2019

The colourful Taylor’s Checkerspot butterfly has been reintroduced on Hornby Island, BC. Photo courtesy the Taylor’s Checkerspot Butterfly Recovery Project.
Checkerspot Butterfly Recovery Project releases more caterpillars on Hornby Island

Chris Junck Special to Black Press The number of Taylor’s checkerspot butterflies… Continue reading

Paper Excellence took over Catalyst Paper operations in B.C. in 2018. (Paper Excellence photo)
The Baynes Sound Connector leaves Denman Island en route to Buckley Bay. Photo by Erin Haluschak
Baynes Sound Connector undergoing upgrades

The MV Quinitsa is providing service between Buckley Bay and Denman Island

B.C. Centre for Disease Control maps showing new COVID-19 cases by local health area for the week of April 4-10. (BCCDC image)
Parksville-Qualicum passes Nanaimo in new COVID-19 cases

Greater Victoria had more new cases than any other Island area: B.C. Centre for Disease Control

Rainbow trouts thrashing with life as they’re about to be transferred to the largest lake of their lives, even though it’s pretty small. These rainbows have a blue tinge because they matched the blue of their hatchery pen, but soon they’ll take on the green-browns of their new home at Lookout Lake. (Zoe Ducklow/News Staff)
VIDEO: B.C. lake stocked with hatchery trout to delight of a seniors fishing club

The Cherish Trout Scouts made plans to come back fishing soon

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

The following is a list of restaurants offering take-out and patio dining. ADOBE STOCK IMAGE
List of Comox Valley restaurants offering take-out, patio dining options

Restaurants in the Comox Valley continue to adapt to government-imposed restrictions in… Continue reading

Photo by Metro Creative Connection
New campgrounds coming to B.C. parks as part of $82M provincial boost

This season alone, 185 campsites are being added to provincial parks, says Minister of Environment and Climate Change

The Nanaimo Clippers’ game against the Alberni Valley Bulldogs slated for Thursday, April 15, has been postponed due to a “potential positive COVID-19 test result,” says the BCHL. (News Bulletin file photo)
Nanaimo Clippers COVID-19 test negative, team can practise and play

Junior A hockey team had suspended activities the day before out of ‘abundance of caution’

For the fourth consecutive Friday afternoon, citizens gathered March 26 in Courtenay to bring attention to the issue of old-growth logging practices in B.C. File photo
Comox Valley Regional District to raise concerns about old-growth logging

The Comox Valley Regional District board received a resolution from Area B… Continue reading

The plane blasted through an airport fence and down a hill, before stopping before a cement barrier on Highway 5A, right in front of a school bus. Photo submitted.
Student pilot crashes plane onto Highway 5A almost hitting school bus

Aircraft hit pavement right in front of school bus

Eight-year-old Piper and her family were raising money to help Guinevere, the bearded dragon, get a gynecological surgery. Sadly, the reptile didn’t survive the procedure. (Jackee Sullivan/Special to Langley Advance Times)
Lizard fails to survive surgery, GoFundMe dollars help Langley family offset medical bills

Guinevere, a pet bearded dragon, underwent an ovariectomy on Tuesday

Most Read