Savage, KCS enter agreement for Texas unit train crude oil destination terminal
Written by jrood
Savage Companies and Kansas City Southern have entered into a joint development agreement where Savage intends to construct, own and operate a large multi-user rail terminal in Port Arthur, Texas, on property owned by Kansas City Southern. The Terminal, to be known as the Port Arthur Crude Terminal (PACT), will be served by KCS, and will be designed to bring unit train rail service of Bakken Shale Formation crude oil, as well as other formation crude supplies, to the Gulf Coast for distribution to pipeline or refining consumers in Texas. The 480-acre site on which the Terminal will be built has long been held by KCS for future development and is attractive due to its proximity to the refining industry and pipeline network. The property is also adjacent to KCS' multi-million ton capacity Pabtex coal and coke export terminal, which is operated by Savage. The Terminal will feature an extensive rail complex for unit trains and crude oil tank storage. Savage has begun first level engineering, design and permitting studies and anticipates that construction will begin later this year, with completion expected by the second quarter of 2012. Savage expects to immediately commence discussions with potential customers and subscribers at the Terminal. Plans call for Savage and KCS to work with other railroads in securing joint unit train service design for the Terminal. Allen B. Alexander, Savage's CEO and chairman in Salt Lake City, said: "We are pleased to grow and broaden our relationship with KCS and excited to expand our services to provide a destination crude-by-rail terminal on the US Gulf Coast. All of us at Savage are committed to serving this important industry by designing and operating critical touch points of the crude oil supply chain." "We believe the Port Arthur refinery complex and the readily accessible storage and distribution infrastructure in the area make this site an attractive destination for North American crude production," said David L. Starling, KCS president. "Savage is a natural partner for us given our existing arrangement at the Pabtex facility and Savage's expertise and commitment to the refining industry."
