(The following story by Rod Walton appeared on the Tulsa World website on January 3, 2010.)
TULSA, Okla. — A Houston-based oil producer has begun delivering crude by rail to a new unloading facility in Stroud, officials said Monday.
EOG Resources Inc.’s first trainload — 61 units containing up to 60,000 barrels — arrived Sunday at the Stroud site, company spokeswoman Elizabeth Ivers said.
The oil is being put into a 17-mile pipeline system bound for the giant terminal at Cushing.
The first train departed Thursday from Stanley, N.D., Ivers said. The crude oil is produced out of EOG’s stake in the Bakken Shale, where the company holds 500,000 net acres.
“EOG owns and operates both sites and the connecting pipeline,” Ivers said.
The company contracted with railroad service firm Watco Cos. Inc to supply labor and transportation logistics, she added.
The Stroud unloading facility eventually will employ 35 to 45 people. EOG’s initial target is one train arriving per day, although early shipments may contain less than the 60,000-barrel capacity.
Construction on the Stroud and Stanley sites began in 2009’s second quarter. EOG opted for the rail alternative because Bakken Shale oil production currently exceeds pipeline takeaway capacity, according to reports.
Crude from the rich Bakken shale formation in the western part of North Dakota now is discounted more than $10 per barrel because of difficulty in getting the oil to market, said Lynn Helms, director of the state’s Department of Mineral Resources, in a report by The Associated Press.
The Cushing interchange, the world’s largest oil storage hub, has capacity for close to 50 million barrels. The delivery point is also the benchmark pricing point for West Texas intermediate crude oil futures at the New York Mercantile Exchange.