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

Marchers supporting Indian farmers rallied in Surrey last month, from Bear Creek Park to Holland Park along King George Boulevard. (File photo: Tom Zillich)
Surrey MP says mayor’s motion to support Indian farmers is his to make

“He has his own sovereignty, right,” Sukh Dhaliwal says

Lord Tweedsmuir’s Tremmel States-Jones jumps a player and the goal line to score a touchdown against the Kelowna Owls in 2019. The face of high school football, along with a majority of other high school sports, could significantly change if a new governance proposal is passed at the B.C. School Sports AGM May 1. (Photo: Malin Jordan)
Power struggle: New governance model proposed for B.C. high school sports

Most commissions against new model; BCSS and its board in favour

Researchers say residents should leave sleeping bats alone while they exit hibernation. (Cathy Koot photo)
Spring ‘signal’ brings White Rock, Surrey bats out of hibernation

Community Bat Programs of BC says it’s best to leave sleeping bats alone

(Photo: Creative Outlet)
YOUR MONEY: Tax tips for a complicated tax season involving CERB and more

With April 30 tax deadline, ‘it is important to understand the tax implications (benefits) will have’

The Delta Police Department’s Equity, Diversity and Inclusion Unit: (from left) Const. Joel Thirsk, analyst Jody Johnson and Staff Sgt. Sukh Sidhu. (Delta Police Department photo)
Delta police respond to rising number of hate crimes

Police have received 15 reports so far in 2021, compared to 12 in all of 2020

A woman wears a protective face covering to help prevent the spread of COVID-19 as she walks past the emergency entrance of Vancouver General Hospital in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
Top doctor warns B.C.’s daily cases could reach 3,000 as COVID hospitalizations surge

There are more than 400 people in hospital, with 125 of them in ICU

The father of Aaliyah Rosa planted a tree and laid a plaque in her memory in 2018. (Langley Advance Times files)
Final witness will extend Langley child murder trial into May or June

Lengthy trial began last autumn with COVID and other factors forcing it to take longer than expected

The corner of 96th Avenue and Glover Road in Fort Langley now has traffic signals, and new “touchless” signal activation buttons. (Matthew Claxton/Langley Advance Times)
Busy Fort Langley intersection gets ‘touchless’ crosswalk signals

The new traffic light started operation in April

A crossing guard stops traffic as students wearing face masks to curb the spread of COVID-19 arrive at Ecole Woodward Hill Elementary School, in Surrey, B.C., on Tuesday, February 23, 2021. A number of schools in the Fraser Health region, including Woodward Hill, have reported cases of the B.1.7.7 COVID-19 variant first detected in the U.K. THE CANADIAN PRESS/Darryl Dyck
COVID-infected students in Lower Mainland schools transmitting to 1 to 2 others: data

Eight to 13 per cent of COVID cases among students in the Lower Mainland were acquired in schools, B.C. says

Dr. Bonnie Henry – in a B.C. health order that went into effect April 12 – granted WorkSafe inspectors the power to enforce workplace closures with COVID-19 spread. THE CANADIAN PRESS/Jonathan Hayward
24 workplace closures being enforced in Fraser Health under new COVID-19 order

WorkSafe inspectors the power to enforce closures if COVID-19 has spread to 3 or more employees

Maple Ridge Fire and Rescue were conducting training operations at Gold Creek Falls when a firefighter broke their leg. (Eileen Robinson photo - Special to The News)
Firefighter suffers broken leg during swift water rescue practice in Golden Ears park

A training exercise at Maple Ridge waterfall on Wedesday results in mishap

Norm Scott, president of Royal Canadian Legion Branch # 91, is disappointed the Legion does not qualify for COVID financial assistance from the provincial government. (Black Press Media file photo)
B.C.’s pandemic aid package passing Legion branches by

Federal non-profit status stymies provincial assistance eligibility

Latest modelling by public health shows cases generated by COVID-19 infections into places where it can spread quickly. (B.C. Centre for Disease Control)
Industrial sites, pubs, restaurants driving COVID-19 spread in B.C.

Infection risk higher in offices, retail, warehouses, farms

Most Read