Rail best for Bakken, Enbridge says

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CALGARY, Alberta, Nov. 27 (UPI) -- Canadian energy company Enbridge says rail deliveries from the Bakken oil play in North Dakota to refineries in Philadelphia are its best option.

Enbridge Rail, a U.S. subsidiary of the pipeline company, announced it signed an agreement with Canopy Prospecting Inc. to form the Eddystone Rail Co. Both sides will work on a rail system and associated infrastructure near Philadelphia that can handle up to 80,000 barrels of oil per day from the Bakken play.

"Rail is the fastest way to provide increased export capacity out of the Bakken, creating a near-term solution to transportation bottlenecks and the resulting crude oil pricing differentials," Stephen Wuori, president of liquids pipelines at Enbridge, said in a statement.

Enbridge said the project's initial capacity could double to 160,000 bpd by mid-2014. Enbridge said it estimated the total cost of the project at around $68 million.

Oil production in North Dakota is second only to Texas in the United States. The region lacks adequate pipeline capacity to get oil to refineries, however.

The Association of American Railroad said, for last week, U.S. petroleum deliveries by rail were up 54.2 percent compared with the same time last year.