USD, Gibson Launch ‘DRUBit by Rail’

Written by Marybeth Luczak, Executive Editor
“The launch of DRUbit™ by Rail™ helps us achieve key sustainability goals while creating new efficiencies for customers,” CP posted on Twitter. (Picture Courtesy of CP.)

“The launch of DRUbit™ by Rail™ helps us achieve key sustainability goals while creating new efficiencies for customers,” CP posted on Twitter. (Picture Courtesy of CP.)

The Hardisty Energy Terminal in Alberta has opened a diluent recovery unit, and the DRUbit™ it creates, a proprietary heavy Canadian crude oil specifically designed for rail transportation, is ready to ship, according to the terminal’s 50-50 joint venture of US Development Group (USD) and Gibson Energy.

The recovery unit, opened in August and now fully operational, uses USD technology to separate “the diluent that has been added to the raw bitumen in the production process,” according to USD. “[I]t returns the recovered diluent for reuse in the Alberta market, reducing delivered costs for diluent, and it creates DRUbit™.” The company explains that DRUbit™ is “crude oil or bitumen that has been returned to a more concentrated, viscous state.” It “does not meet any of the defined categories of hazardous materials by U.S. DOT Hazardous Materials regulations and Canada’s Transport of Dangerous Goods regulations,” according to USD, which calls DRUbit™ “a market access solution that will satisfy demand for heavy Canadian crude oil on the U.S. Gulf Coast and in other markets at a cost that is economically competitive to the crude oil that is transported by pipeline today.”

The Hardisty Energy Terminal is located adjacent to USD’s existing Hardisty Rail Terminal, which is the origination terminal for transloading DRUbit™ onto railcars for shipment. The current DRUbit™ destination terminal is the USD-owned and operated Port Arthur Terminal (PAT) in Port Arthur, Tex., which unloads the DRUbit™, blends it to customers’ specifications, and delivers it through pipe or barge, according to USD. The DRUbit™ is owned by ConocoPhillips.

The DRUbit™ by Rail™ network, USD said, is supported by Canadian Pacific (CP) and Kansas City Southern (KCS).

USD CEO Dan Borgen

“Our DRU [diluent recovery unit] separation technology and DRUbit™ by Rail™ network create a first-of-its-kind infrastructure to move heavy Canadian crude throughout North America in a way that is safe, environmentally beneficial and economically advantaged to current pipeline alternatives,” USD CEO Dan Borgen said. “We are thrilled to work with ConocoPhillips Canada, Gibson, CP and KCS to deliver this industry solution that we believe will positively impact our existing and future producer and refiner customers.”

Gibson President and CEO Steve Spaulding

“We were pleased to see the Hardisty Energy Terminal fully operational in-line with budgeted capital cost,” Gibson President and CEO Steve Spaulding said. “We consider DRUs to be a cost-effective, scalable, environmentally attractive long-term egress solution for the basin, and we remain in commercial discussions for potential additional phases at the Hardisty Energy Terminal.  Importantly, we believe that this and future phases will improve netbacks for producers, driving increased oilfield and related business activity, creating new jobs and helping revive communities.”

ConocoPhillips Canada President Bij Agarwal

“Using the DRU separation technology and DRUbit™ by Rail™ network improves netbacks and overall returns as we move our bitumen production to high-value North American markets,” ConocoPhillips Canada President Bij Agarwal said.

“The launch of DRUbit™ by Rail™ over the CP network helps us to achieve key sustainability goals while creating new efficiencies for customers,” CP President and CEO Keith Creel said. “CP is proud to work with USD and Gibson to make this innovative terminal a success.”

“KCS is pleased to be a strategic partner in this innovative solution to improve the safety and economics of moving crude oil,” KCS President and Chief Executive Officer Patrick J. Ottensmeyer said. “It’s also a great opportunity to grow our business in the Gulf Coast area and further develop our strategic presence in the Port Arthur market.”

Keith Creel, President and CEO of CP (left), and Pat Ottensmeyer, President and CEO of KCS, are Railway Age’s 2022 Railroaders of the Year.

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