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

Supporters gather outside GraceLife Church near Edmonton, Alta., on Sunday, April 11, 2021. The church has been fenced off by police and Alberta Health Services in violation of COVID-19 rules. THE CANADIAN PRESS/Jason Franson
Hundreds gather to support Alberta church shut down for ignoring COVID-19 orders

GraceLife Church and its pastor, are charged for holding services that break health restrictions

Asymptomatic testing will now be available for "priority groups" who are most likely to spread the COVID-19 virus to vulnerable or at-risk populations. File photo by THE CANADIAN PRESS
Alberta identifies 1,183 new COVID-19 cases on Sunday

50.5% of all active cases are variants of concern

File photo
A man walks into a Cargill meat processing factory. THE CANADIAN PRESS/Graham Hughes
Alberta meat plant, site of COVID-19 outbreak last year, to get vaccination clinics

Nearly half of the 2,200 workers at the Cargill facility contracted the novel coronavirus and two employees died last April

Grand Chief Wilton Littlechild, left, Grand Chief Arthur Noskey, centre and Chief Aaron Young during a meeting with First Nations Chiefs and Grand Chiefs in Edmonton. THE CANADIAN PRESS/Jason Franson
Alberta must retract Forest Act before it becomes law: Treaty 8 grand chief

‘We are asking (the government) to pull this back and consult with us,’ says Arthur Noskey of Treaty 8 First Nations

A cross made out of hockey sticks at a makeshift memorial is silhouetted against the setting sun at the intersection of a fatal bus crash near Tisdale, Sask., on Monday, April, 9, 2018. A virtual tribute is planned to mark the third anniversary of the Humboldt Broncos bus crash. THE CANADIAN PRESS/Jonathan Hayward
VIDEO: Humboldt Broncos team to be honoured on third anniversary of fatal bus crash

16 people died and 13 were injured when a semi-trailer ran a stop sign into the path of the hockey team’s bus

Chief Public Health Officer Theresa Tam speaks during a technical briefing on the COVID pandemic in Canada, Friday, January 15, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Canada’s ICUs see near-record of COVID-19 patients last week as variant cases double

Last week, Canadian hospitals treated an average of 2,500 patients with COVID-19, daily, up 7% from the previous week

Vancouver’s park board general manager issued a new order Friday restricting tents and other temporary structures from being set up in Strathcona Park after April 30, 2021. THE CANADIAN PRESS/Jonathan Hayward
Vancouver park board issues order to restrict tents in Strathcona Park

The order issued Friday restricted tents and other temporary structures from being set up after April 30

Stettler’s own Renegade Station is kicking off the spring season with a brand new single - to be released April 9th. (Photo submitted)
A brand new single is on the way from Stettler-based band Renegade Station

Free Free Free hits all streaming platforms on April 9th

Foreign Affairs Minister Marc Garneau waits for a virtual meeting to begin with US Secretary of State Antony Blinken in Ottawa, Friday February 26, 2021. THE CANADIAN PRESS/Adrian Wyld
Ottawa mulls exempting more workers from Canada-U.S. border shutdown: Garneau

Canada-U.S. border has been closed to people travelling for vacations and other non-essential visits since March 2020

A worker smooths concrete at a construction site in Toronto on January 16, 2020. THE CANADIAN PRESS/Cole Burston
Economy adds 303,000 jobs in March, unemployment rate falls: Statistics Canada

Figure released this morning outpaced the 259,000 gain seen in February

FILE - This file photo dated July 10, 1947 shows the official photograph of Britain’s Princess Elizabeth and her fiance, Lieut. Philip Mountbatten in London. Buckingham Palace says Prince Philip, husband of Queen Elizabeth II, has died aged 99. (AP Photo/File)
Prince Philip, husband of Queen Elizabeth II, dies at 99

Philip spent a month in hospital earlier this year before being released on March 16

Campbell River city council will continue its 2020 policy of waiving late fees and NSFs. (Mirror File photo)
53% of Canadians teetering the brink of insolvency: survey

A majority of Canadians admit they’re just $200 away from not being able to pay their monthly bills

Alberta Premier Jason Kenney listens as the 2021 budget is delivered in Edmonton Alta, on Thursday, Feb. 25, 2021. THE CANADIAN PRESS/Jason Franson
Kenney faces criticism from doctors, his own caucus, over new COVID-19 health rules

Alberta now has more than 10,000 active cases, about 43 per cent are variants

Most Read