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CP Railway shipping crude from new terminal

BISMARCK (AP) -- Canadian Pacific Railway Ltd. has begun shipping rich Bakken crude to the Gulf Coast from a rail-loading facility under construction in western North Dakota.

Pasadena, Texas-based U.S. Development Group LLC is building the terminal near the ghost town of Van Hook, about a dozen miles south of New Town in southern Mountrail County.

Canadian Pacific spokesman Ed Greenberg said the Calgary-based railroad has been moving small shipments of crude from the facility since last month.

U.S. Development Group spokeswoman Meg Martin said the facility is slated for completion this summer and will have the capacity to load 30 unit trains per month. The mile-long unit trains typically consist of up to 104 railcars, with each car containing about 650 barrels of crude.

The company said the terminal's initial capacity is about 35,000 gallons daily, or about half the capacity of a typical unit train. The cost of the new terminal was not disclosed.

Martin said Canadian Pacific is the only railroad using the facility and most of the shipments will be bound for U.S. Development's terminal in St. James, La., some 1,800 miles away. North Dakota surpassed Louisiana in 2009 as the fourth-largest oil-producing U.S. state.

North Dakota oil producers increasingly have been shipping barrels to Louisiana and other more profitable markets not served by pipelines.

Justin Kringstad, director of the North Dakota Pipeline Authority, said the new terminal near Van Hook is the 12th such facility to be built in North Dakota since 2008. Three other rail-loading facilities are planned in the oil patch, he said.

Rail shipments account for about one-quarter of the more than 530,000 barrels produced daily in North Dakota, Kringstad said.

BNSF Railway Co. hauls about 75 percent of the oil that currently leaves North Dakota by train, Kringstad said.

Canadian Pacific plans to invest about $100 million to upgrade its main line in the region to handle increased Bakken crude shipments, Greenberg said.