Savage, KCS enter development contract
Apr 12, 2011 3:15 PM
Savage Companies and Kansas City Southern (KCS) have entered into a joint development agreement whereby Savage intends to construct, own, and operate a large multi-user rail terminal in Port Arthur TX on property owned by The Kansas City Southern Railway Company. The terminal, to be known as the Port Arthur Crude Terminal (PACT), will be served by KCS, and will be designed to bring unit train rail service of Bakken Shale Formation crude oil, as well as other formation crude supplies, to the Gulf Coast for distribution to pipeline or refining consumers in Texas.
The 480-acre site on which the terminal will be built has long been held by KCS for future development, and is attractive due to its proximity to the refining industry and pipeline network. The property is also adjacent to KCS’ multi-million ton-capacity Pabtex coal and coke export terminal, which is operated by Savage. The companies have enjoyed a solid, long-term relationship in Port Arthur. The terminal will feature an extensive rail complex for unit trains and crude oil tank storage. Savage has begun first level engineering, design, and permitting studies, and anticipates that construction will begin later in 2011 with completion expected by the second quarter of 2012.
Savage expects to immediately commence discussions with potential customers and subscribers at the terminal. Plans call for Savage and KCS to work with other railroads in securing joint unit train service design for the terminal. Savage and KCS are also exploring the potential of receiving other products at PACT including certain refined products in concert with KCS’ Mexican gateway.
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