Exec says U.S. north needs more oil lines

Nov. 9, 2012 at 7:27 AM

HOUSTON, Nov. 9 (UPI) -- A U.S. energy company said that while rail shipments of oil from northern U.S. plains states were increasing, there's still a need for oil pipelines.

In September, the Association of American Railroads said transportation of petroleum products was up nearly 50 percent compared to the same period last year. That same month, BNSF Railway, which operates 32,000 route miles of rail in the United States and Canada, said it was investing $197 million in rail expansion in North Dakota and Montana. The expansion would allow the railroad to transport 1 million barrels of crude oil per day from the region.

John Hart, chief financial officer at upstream operator Continental Resources, said rail shipments from oil fields in the region wouldn't displace pipelines. Production from the region, he said, is expected to reach 2 million barrels per day in the near future.

"There will definitely be a need for pipelines," he was quoted by the Platts news service as saying from Houston.

The company this week said it acquired more acreage in the Bakken crude oil formation in North Dakota, where production was about 6,500 barrels of oil equivalent per day.

The company said it's the largest leaseholder in the Bakken formation, with close to 1 million net acres on hand.

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