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BNSF to increase Bakken rail capacity

Freight player BNSF Railway plans to increase its capacity to haul oil from the Bakken play, enabling operators in the Williston basin to transport an extra 1 million barrels per day of production from North Dakota and Montana.

The company plans to invest $197 million this year in the Bakken, including laying down 2188 miles of track surfacing, two new inspection tracks, raising track at Devil’s Lake, and replacing 121 miles of rail.

“Historically, oil and gas producers have used pipelines to transport crude from production to refineries and ultimately on to end users,” John Lanigan, BNSF executive vice president, said in a statement.

“Because this shale development growth came about so quickly, there has been a shortage of pipeline capacity to deliver production from new unconventional sources to coastal refiners. BNSF has responded quickly to enable producers to move crude to the most attractive markets and secure the best prices.”

BNSF’s rail network will give producers access to all major coastal and inland markets, with direct service to 30% of US refineries in 14 states, the company said.

BNSF currently has 1000 miles of rail line in the Williston basin and serves eight originating terminals with two more scheduled to be completed by the end of this year.

BNSF connects to 16 of the top 19 oil producing counties in central and western North Dakota, and five of the six oil-producing counties in eastern Montana.

The company said that in its five years servicing the Bakken area, the volume of oil it has hauled has increased by 7000%, from 1.3 million barrels in 2008 to 88.9 million in 2012.