The waterborne terminal is to be constructed on a 200-acre parcel leased by Global from Kansas City Southern, and initially, it will serve as a destination for heavy crude from Western Canada. Storage capacity is targeted at 340,000 bbl and the terminal is expected to accommodate up to two unit trains of crude oil per day.

“The addition of a crude destination terminal on the U.S. Gulf Coast will broaden and strengthen our logistics network,” noted Global CEO and president Eric Slifka. He highlighted the terminal’s strategic location, noting that nearly 5-million b/d of refining capacity sits within a 100-mile radius of the facility. Global has logistics assets on the East and West Coasts as well as within the Bakken shale formation in North Dakota, but this move will represent the company’s first foray into Gulf Coast properties.

The development project is a vote of confidence for the continued reliance on rail to move Canadian heavy crude to the region, and could suggest that railroad and logistics companies have their doubts about the construction of the Keystone XL pipeline. Heavy Canadian crude, such as Western Canadian Select (WCS) currently fetches a price some $20-$21 bbl beneath WTI futures, and can lay into Gulf Coast points at prices underneath alternatives like Mexican (Mayan) heavy crude.

Construction of the terminal is contingent upon Global’s receipt of all necessary permits.