The Long Creek Railroad is up and operating, or at least it will be very soon.
Glenn Pederson, president of the rail line entity that has 25 shareholders from southeast Saskatchewan, representing a healthy number of grain producers from the area, said he expected the line would be running its first train this week.
“We have a locomotive leased from Central Canadian Rail of Ontario pulling the cars for now,” he said.
The grand opening is tentatively slated for Oct. 2 in the former community of Southall where there is a rail transloading station built and ready to transfer local oilpatch products into tanker cars for delivery to refineries.
“We have 41 miles of track from Estevan to Tribune. Torq Transloading has built the transfer site at Southall for oil products. In the first phase we'll be able to load 25 cars and there is room and allowances for up to 100 cars,” he explained.
Long Creek has partnered with Canadian Pacific Railway for the business that could see the oil being shipped to Chicago area refineries or elsewhere if required, to be processed.
“We're having no problem getting the cars, that's their baby, we're just the tracking company. We own the line,” said Pederson.
Taking oil transloading facilities out of more heavily populated areas is a popular idea right now and the process can move more efficiently when there are fewer people and vehicles around. But for now, CPR is still using an Estevan-based transloading site in the heart of the city.
“We wanted to get this moving along last year but because of the flooding, it just wasn't possible,” said Pederson.
The original intent of simply loading grain cars is not lost either. That is still going to be a main commodity that will be moved by Long Creek. Plans are also in the mix to transport oilpatch pipe and sand that is used for oilfield fracturing (fracking) operations.
The Long Creek rail line hooks up with CPR .34 of a mile out on the southwest side of Estevan ... outside the city and they share track to Mile 2. Long Creek also retains about 20 acres of land south of the city that they expect to turn into a pipe storage and transportation yard under the Long Creek banner.
Pederson said a move to buy the rail line began as far back as 2008. The group of local farmers that were interested in the grain loading opportunities at that time challenged the evaluation put on the line and that negotiation ended up in the Federal Court of Appeals before it was finally settled.
The actual takeover of the line was to have been in May of 2011, but some glitches with the deal with CPR in February of that year led to the delay, then the floods came so another delay was implemented until the condition of the track could be verified. For instance, Pederson said the bridge behind Rafferty reservoir was a concern, but there had been no major water flow pressure compromising it, so the deal moved slowly forward again.
“We took possession of the track eight or 10 months ago after the track and bridge had been inspected,” said Pederson. “That was after we had hammered out another agreement. Then we wanted to make sure maintenance would be good and then Torq started to build the transloading site in July.”
Pederson said the original plan back in 2008 was for the local owners/operators to load up to 500 cars with grain and move them to port during harvest, saving elevation and longer trucking expenses.
That still holds, but now the consortium finds itself with the opportunity of loading oil on as many as five to 10 cars a day or about 1,500 cars or more a year.
Transloading agreements have been signed with the RM of Souris Valley No. 7. There are about 4.5 miles of grid road to consider and crossings along Highway 35 south of Tribune and the Bromhead to Tribune line.
Pederson said the group has hired Bob Holden as their general manager to take the 25 shareholders into this new type of enterprise.
“The original plan was just for grain and it was going to be a toss-up for breaking even from a corporate business sense, so oil is the bonus,” said Pederson.
“It's the same distance to the ocean as it has always been, and this (rail) is another efficient way to get products there. It's an open market, now with the end of the Canadian Wheat Board, so we have to look at the big picture. To get the product to market do we haul to the local elevators or load our own cars? Our rail line is closer to the farms. Each of us can save $7 to $10 a tonne on freight and even more when you consider reduced elevator storage and time. We've been in contact with the grain companies and making the deals. CP will drop cars off near Estevan and our leased locomotive will pick them up. They'll get filled and moved.”
Pederson said the recently refurbished rail is in good condition so won't require major maintenance for a few more years. “The iron and ties are in good shape. We had to do a little work at the road crossings.”
So far the lease on the locomotive extends for 18 months and it is available to Long Creek whenever they need it. After that the company will have to make a decision to either keep leasing or making a purchase or have some other arrangement in place.
“We'll see how it all pans out,” said Pederson in conclusion.