Omnitrax Inc., a private U.S. company that owns Churchill, Man.’s port and the rail line to the community, is planning oil exports.
Under the plans by Omnitrax, light-grade crude from Alberta and the Saskatchewan-North Dakota Bakken region, shipped to Churchill on its Hudson Bay Railway, could also feed refineries on the East Coast of North America.
The company plans to spend $2-million on a trial run as early as October so it can make adjustments to the port facilities. If approved by Transport Canada, the commercial phase – the loading of 10 tankers per season – would cost a “multiple of millions of dollars” to beef up the pipeline needed to transfer oil to ships, add pumps and install a new storage tank, he said. Omnitrax aims to start shipments next year or in 2015.
Omnitrax has been in contact with about 25 oil producers as it seeks to attract volumes to Churchill, the northern harbor that is ice-free from July to October. The Manitoba government, which has helped fund track upgrades in recent years, supports diversifying the products moving on the Hudson Bay rails and through the port, but it is not ready support the project until it is satisfied that Omnitrax’s rail system can safely handle the volume of oil the company proposes.
For more than 50 years, Churchill Fuel Terminal (CFT) has provided reliable and timely fuel service to industry, governments, aviation, and military customers that are located in and that travel through the region. CFT is one of the largest fuel terminal in the Arctic, with a 50mm-litre capacity.
Hudson Bay Railway Company (HBRY) owns and operates over 627 miles of former Canadian National (CN) trackage with a network that connects with CN in The Pas, running north through Manitoba to Churchill, the only deep sea port on the Arctic ocean in North America.
OmniTrax may be on to something big. Oil production in North America is on its way up—from the Bakken, the oil sands and reinvigorated old fields. The Keystone XL proposal has been on President Obama’s desk for 5 going on 6 years. The Northern Gateway pipeline from Edmonton to Kitimat has an uncertain future. Trans-Canada has announced plans to convert its mainline gas pipeline which runs from Alberta to Ontario to oil. Pipelines take years to build, while railways can easily scale up to meet demand.