HOUSTON, Aug. 27 (UPI) -- Genesis Energy, based in Houston, said it was ready to start construction on a new crude oil unit in Louisiana for unloading barrels delivered by rail.
The company said it's filed all the necessary paperwork, completed the engineering work and secured the proper agreements to start construction on a facility in Raceland, La., that can unload crude oil delivered by rail.
Genesis said the rail terminal would connect to pipelines feeding refineries in Baton Rouge and St. James.
"The total cost to Genesis of the Raceland Rail Facility project, which includes more than 400,000 barrels of new crude oil storage and pipeline infrastructure, is expected to be less than $75 million," the company said in a statement Monday.
Energy companies working in the United States have turned to rail as booming production levels strain existing pipeline capacity. The Energy Department this week said crude oil production in July increased to 7.5 million barrels per day, the highest level in more than 20 years.
The Association of American Railroads said deliveries in July of petroleum and petroleum products increased 24.9 percent when compared with July 2012. The increase for petroleum deliveries is consistent with an ongoing trend, it said.
Genesis said the rail facility would be in service by next year.