CHICAGO Plains All
American Pipeline LP has acquired four crude oil rail terminals
and one under development from U.S. Development Group LLC for
$500 million, the companies said Wednesday.
Houston-based Plains All
American said the move represents a significant addition to its
rail activities in North America.
"Given recent and projected
increases in North American crude oil production ... we believe
that strategically located rail loading and unloading assets
will continue to play an important role in the transportation
of crude oil in North America," chairman and chief executive
officer Greg L. Armstrong said in a statement.
The deal with U.S. Development
Group, also based in Houston, includes three crude oil rail
loading terminals in the Eagle Ford, Bakken and Niobrara shale
regions; a rail unloading terminal in St. James, La.; and a
project to build a crude oil unloading terminal near
All three shale playsthe
Eagle Ford in south Texas; the Bakken shale, which underlies
parts of the Dakotas, Montana and Saskatchewan; and the
Niobrara shale, located largely in Coloradocontain
With the deal, Plain North
American said it would have crude oil rail loading facilities
extending from the U.S. Rocky Mountains to south Texas and
unloading capacity on the East Coast, West Coast and Gulf
Plains All American said it
expects to have approximately 6,700 rail cars leased by the end
Energy transmission firms such
as Plains All American increasingly have shifted investments
toward rail capacity to move oil as drilling activity ramps up
in places that had not been traditional sources of oil in the
United States and where pipeline capacity is lacking (
amm.com, June 12).
In another recent deal, a
subsidiary of Enbridge Inc., Calgary, Alberta, formed a joint
venture with Canopy Prospecting Inc., Edgemont, Pa., to develop
rail capacity that would deliver crude oil from the Bakken
shale in North Dakota to refineries in Philadelphia (
amm.com, Nov. 27).