North Dakota’s oil production is in full force, and so are the industry’s related vendors and suppliers. Bakken Oil Express (BOE) completed the first phase of its rail hub last October and moved its first train of crude oil last November, making it the first multi-shipper unit train loading operation in North Dakota.
The rail hub connects to the BNSF rail lines, giving trains coming from the Bakken Shale access to out-of-state markets. Unlike some other rail hubs owned by oil producers that ship exclusively for their own needs, the BOE rail hub ships for any and all operators located in the Bakken Shale. The BOE rail hub receives oil via truck or pipeline and loads 100-car unit trains at an average rate of 13 hours that are then ready to travel via BNSF rail.
“This terminal is different than other companies in the fact that it’s a merchant’s terminal,” says John Wadsworth, director of engineering and construction. “We’ll ship oil and move oil for any shipper. Some companies like EOG will only move for EOG or Hess is moving oil for Hess Oil, but Bakken Oil Express moves for any shipper moving oil.”
Into the Next Phase
Located within the Three Forks shale play and in close proximity to pipelines originating from the heart of the Bakken Shale, the site’s current capacity sits at 100,000 barrels of oil per day and is in the middle of the second phase of an expansion that will increase its capacity to 200,000 barrels of oil per day.
“We have about 350 acres of land in Dickinson, N.D., and on about half the land, we’ve developed a crude oil rail terminal and the other half has been developed for frac sand, cement and oil field supplies. The facility consists of over 35,000 feet of rail on the ground and we now have five storage tanks for storing crude oil,” says John Wadsworth, director of engineering and construction. “We receive crude oil by pipeline and truck and can store it in our tanks and load it onto the rail cars for rail transport. We currently have one loading rack, but we are getting ready to expand this facility.”
Construction for the fast-tracked first phase commenced in November 2010 with ground-up construction beginning in spring 2011. The first phase delivered two 8,000-foot-long rail loops, several tanks capable of holding 210,000 barrels of oil, a truck center with six independent bays, and plenty of room for expansion. It also includes 20,000 feet of rail for material delivery for supply companies bringing in related products such as sand used for hydraulic fracturing and cement used for construction.
The facility, designed by MKEC Engineering Consultants Inc., also includes necessary safety and environmental precautions. “We also have a lot of environmental engineering included in our design to make sure oil doesn’t spill on the ground and that vapor emissions are controlled via our flare system,” Wadsworth says. “A computer control system monitors all products and operations to prevent a release of oil. We have spill prevention measures so that if oil is spilled, it’s captured. Tank dikes are lined for spill containment and the rail loading rack has spill pans under the rail cars in case of overflow.”
At the time of its opening, the company announced a long-term anchor shipper agreement with Eighty-Eight Oil, LLC for transloading crude oil at the facility.
“Eighty-Eight congratulates Bakken Oil Express for their efforts in the concept, design and tenacity in getting to the finish line for this project and is excited about the opportunity to work with BNSF and the Bakken Oil Express Hub,” states Jerry Herz, superintendent of Eighty-Eight.
“We are looking forward to moving additional volumes of North Dakota crude oil by rail that will provide access to alternate markets for our customers.”
The second phase, which is under way, will conclude by early 2013. This next phase includes a second loading rack, additional truck unloading and rail car loading capacity and additional tanks and pumps.
The expansion is good news for oil producers who at times produce more product than they can ship by pipeline, which is one of the major challenges for producers in the state, Wadsworth says.
“We picked this area for two reasons,” Wadsworth says. “One is that this is where BNSF’s mainline is and in North Dakota it’s the southern line and oil production from the Bakken is moving in that direction.
“There is a lot of production activity north of the Missouri River in the Williston area and Williams County and the oil production is moving to the south and pipelines are full of oil products,” Wadsworth continues. “There is a shortage of pipelines to move oil to out-of-state markets. We picked the Dickinson location because of BNSF and because of the fact that oil production is moving in this direction.”
Working with the Rails
BOE connects to the Four Bears/Belle Fourche regional pipeline system and will accept product by truck or this pipeline system from any producer and load it onto the producer’s rail cars. In order to accommodate a variety of customers, BOE designed its rail car loading system to connect with different rail car types.
“We have to have different types of connectors available for the loading arms,” Wadsworth says. “They have to be changed out depending on the rail car that’s being loaded. They are all 30,000-gallon tank cars but have different connections on them.”
BOE isn’t the only company responding to the needs of Bakken Shale oil producers. Upon seeing this growing market that has already exceeded projections of 600,000 barrels of oil per day and is moving toward 1 million barrels of oil per day, BNSF plans to service two more unit train facilities operational by the end of this year, giving it 10 unit train facilities serving North Dakota oil producers. BNSF is currently responsible for shipping out 25 percent of all oil production from the Bakken Shale, the company says.
“We’re constantly looking for more and more efficient ways to work with these shippers to streamline the process of moving off of our system and into a transload facility,” according to Tom Williams, BNSF’s vice president of industrial products.
“Working with BNSF has gone really well,” Wadsworth says. “Unit trains have become a growing business with all the crude oil being shipped by rail cars. Because of all the unit trains and rail traffic for BNSF, they have had to add people and modify tracks and add tracks to accommodate the growing industry and the BNSF have done that. They’ve been a very good company to work with.” EMI