More crude oil carrying capacity at Edmonton terminal

Midstream company Kinder Morgan said it reached a deal to add more crude oil carrying capacity to a rail terminal in Edmonton already under construction.

Kinder, which has headquarters in Houston, said it agreed with its joint venture partner Imperial Oil Ltd. to take on more take-or-pay contract agreements that would allow for the expansion of the rail terminal.

"The continued interest in this facility, and additional volume being contracted for with this announcement, further demonstrates how important it is for our customers to secure crude oil take away capacity using a variety of transportation options, including both pipeline and railway capacity to ensure crude oil reaches market," Kinder Morgan Terminals President John Schlosser said in a statement Thursday.

The rate of increase in oil production in North America is more than the existing pipeline network can handle. Industry officials say that leaves rail as the primary alternative for crude oil shipments.

The Edmonton rail terminal is a year into construction. It should be completed by the end of the year and then increase its capacity from 210,000 barrels per day at start up to as much as 250,000 bpd.