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Kansas City Southern’s potential crude terminal deal
Kansas City Southern, the fourth-largest U.S. public railroad operator, is close to a deal to build a crude terminal in Port Arthur, Texas.“Demand appears sufficient to support the development of a terminal in the near term and ... we think an announcement could come as soon as the next three months,” Credit Suisse analyst Allison Landry wrote in a client note.
The company said last week it was in “very serious negotiations with a third party to build a facility” to receive heavy crude from western Canada and from the Bakken shale field in North Dakota and Montana.
“If this facility is built ... it would take multiple-unit trains of product a day, (which) would be kind of a game changer for Kansas City Southern ,” company spokesman Bill Galligan said at a Barclays conference in Miami on Feb. 20.
Oil and gas production from shale formations in North America has surged over the past two years, leading to a scramble to get supplies to refining hubs.
Kansas City Southern did not name the company but said it was one “that already has a network in the United States, both on the east coast and the west coast, and they wanted a Gulf facility too.”
Savage Cos said in April 2011 it entered into a joint development agreement to construct a large multi-user rail terminal in Kansas City Southern’s Port Arthur center.
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