WAYZATA, Minn., March 15, 2013 /PRNewswire/ -- Dakota Plains Holdings, Inc. ("Dakota Plains" and "DAKP"), (OTC: DAKP) and joint-venture partner, Petroleum Transport Solutions, LLC, an indirect wholly owned subsidiary of World Fuel Services Corporation ("World Fuel Services"), (NYSE: INT) today jointly announced that construction is underway for the Pioneer Project.
The Pioneer Project represents a significant expansion of the New Town transloading facility located in the heart of the Williston Basin. Crude oil supplying the facility is currently sourced primarily from the Bakken formation that underlies parts of Montana, North Dakota, and Saskatchewan. The Pioneer Project provides a double loop track that will accommodate up to 120 tank car unit trains and will increase the throughput capacity from 30,000 barrels per day to up to 80,000 barrels per day. The partnership will deploy 180,000 barrels of storage to start, with the expansion to 270,000 barrels built into the initial design. The addition of storage tanks will improve the reliability and efficiency of the crude reception by truck and opens the door for crude oil deliveries from gathering systems, or short range pipelines.
Dakota Plains Chairman and CEO, Mr. Craig McKenzie said: "2013 is proving to be another rewarding year for Dakota Plains shareholders as we set out to highly increase the scale of our operations. The Pioneer Project is safe, efficient and economically attractive. It also opens the door to new logistics businesses where DAKP can be an even greater service provider to upstream operators in the basin."
World Fuel Services Senior Vice President, Supply and Trading, Mr. Carlos Cuervo said: "The Pioneer Project will further expand our Bakken crude oil marketing capabilities. We are excited to be playing a major role in expediting this project."
The crude oil will be transported on Canadian Pacific's (TSX:CP) (NYSE:CP) rail network, continuing a partnership between CP and Dakota Plains Holdings and World Fuel Services.
Canadian Pacific, Executive Vice President and Chief Marketing Officer, Jane O'Hagan, said: "Canadian Pacific is pleased to be the rail partner for Dakota Plains and World Fuels as they expand the New Town facility. Through CP's North American network and rail connections, we offer direct service from the Bakken to key refining markets across North America. We look forward to leveraging this expansion and our network to increase the volume of crude moving efficiently into the marketplace and to provide a cost effective way for inbound commodities to reach Bakken production areas."
Completion of the Pioneer project is expected in December 2013; total cost is estimated to be $50 million and will be funded equally by Dakota Plains and World Fuel Services. The existing ladder tracks and Dakota Plains-owned land will be used for inbound delivery, storage and trucking logistics services for commodities such as sand, chemicals, diesel, and pipe. Debt financing will be provided for the Dakota Plains portion of the Pioneer project cost.
Currently, the New Town facility is in its fourth year of midstream operations with three business segments comprising trucking, transloading, and marketing of crude oil and related products originating within the Williston Basin of North Dakota. Land ownership at the New Town facility now exceeds 192 acres, which provides a base for the Pioneer Project expansion.