It is no secret that as North American oil production has surged from 5.5 MMb/d in early 2011 to over 8.6 MMb/d today, certain unconventional oil plays have outgrown pipe capacity, and looked to crude by rail (CBR) to get production to market.
In N. America, if we go back to Q4 2010, there were only a handful of CBR loading terminals in North Dakota, representing under 200 kb/d of capacity, and a few CBR offloading terminals in Oklahoma and Louisiana, representing approximately 155k b/d of capacity.
It is an understatement to say things have changed. BTU Analytics estimates today there are over 200 terminals in service or planned divided into 120 of loading terminals representing 3.8 MMB/d of capacity and 80 unloading terminals representing 2.8 MMb/d of capacity.
Map: BTU Analytics
A 1.0 MMb/d spread today between loading and unloading suggests refiners hold the advantage in sourcing supplies of crude as the ability to put crude on rail exceeds the ability to offload today. Loading terminal development, driven by producer investment in the oil patch, has outpaced unloading terminal development to-date. However, refiners are quickly joining in on the CBR bonanza. BTU Analytics estimates this spread will tighten as planned projects come online through 2017. Loading capacity is expected to grow to 4.9 MMb/d while unloading capacity will reach nearly 4.7 MMb/d. With only about 1.2 MMb/d of crude moving via rail today and new pipeline infrastructure being developed, will all of this crude by rail infrastructure become obsolete or will production growth continue to outpace pipeline developments sending ever increasing volumes via rail?