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Houston-based USD Group looks to double capacity at its Hardisty, AB rail terminal

Canadian crude oil is still making its way south into the U.S. despite the decision by the Obama administration to reject the project plan for TransCanada’s (ticker: TRP) Keystone XL pipeline. Most recently, Houston-based USD Group announced that it plans to double the capacity of its rail terminal in Hardisty, adding heavy crude oil, butane and propane to the mix of products it can load at the terminal.

The Hardisty terminal is relatively new, only having started operations in June 2014. It currently has the capacity to load up to two 120-railcar unit trains per day. Crude oil is delivered to USD Group’s termian via pipeline from Gibson Energy’s Hardisty storage terminal, which holds 6 MMBO, according to USD Group.

The expansion would add capacity for an additional two 120-car unit trains per day, doubling the facilities loading capacity, reports Edmonton Journal. The expansion would supplement existing pipelines and “reduce transportation constraints of oil products in a cost-effective and environmentally responsible manner,” USD Group subsidiary USD Terminals Canada says in a project summary filed with the Canadian Environmental Assessment Agency.

The summery showed USD Terminal Canada plans to build nine new rail tracks and loading infrastructure immediately north of its existing facility, 10 kilometers southeast of Hardisty. If the expansion is made, the new facility could also be supplied by truck.

The next step for the facility expansion will be a public comment period regarding what aspects of the environment might be affected. No date has been announced for the comment period yet.

Keystone XL pipeline map, RailThe White House rejects Keystone, TransCanada sues

Transportation of Canadian crude oil into the U.S. has been a hotly debated topic for the last seven years as TransCanada waited to hear from the Obama administration if it would receive the greenlight on its cross-border project. Even though the State Department’s report said Keystone XL would not have a strong adverse environmental effect, President Obama decided to veto the project approval after seven years of legislative limbo.

Keystone XL was designed to transport 800 MBOPD of crude from Hardisty to Steele City, Nebraska.

Following the announcement from President Obama, TransCanada announced on January 6, that it planned to sue the U.S. government over violations of the North American Free Trade Agreement (NAFTA). TRP hopes to recover more than US$15 billion in costs and damages that it suffered as a result of the administration’s breach of NAFTA obligations.

“In its decision, the U.S. State Department acknowledged the denial was not based on the merits of the project,” said the company statement. “Rather, it was a symbolic gesture based on speculation about the perceptions of the international community regarding the Administration’s leadership on climate change and the President’s assertion of unprecedented, independent powers.”

Meantime more of Canada’s oil will travel south by rail.

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