Salt Lake City, Utah and Kansas City, Missouri – April 1, 2011 – Savage Companies (Savage) and Kansas City Southern (KCS) have entered into a joint development agreement whereby Savage intends to construct, own and operate a large multi-user rail terminal in Port Arthur, Texas, on property owned by The Kansas City Southern Railway Company (the “Terminal”). The Terminal, to be known as the Port Arthur Crude Terminal (PACT), will be served by KCS, and will be designed to bring unit train rail service of Bakken Shale Formation crude oil (the Bakken), as well as other formation crude supplies, to the Gulf Coast for distribution to pipeline or refining consumers in Texas.
The 480-acre site on which the Terminal will be built has long been held by KCS for future development, and is attractive due to its proximity to the refining industry and pipeline network. The property is also adjacent to KCS’ multi-million ton capacity Pabtex coal and coke export terminal, which is operated by Savage. The companies have enjoyed a solid, long-term relationship in Port Arthur. The Terminal will feature an extensive rail complex for unit trains and crude oil tank storage. Savage has begun first level engineering, design and permitting studies, and anticipates that construction will begin later this year, with completion expected by the second quarter of 2012.
Savage expects to immediately commence discussions with potential customers and subscribers at the Terminal. Plans call for Savage and KCS to work with other railroads in securing joint unit train service design for the Terminal. Savage and KCS are also exploring the potential of receiving other products at PACT including certain refined products in concert with KCS’ Mexican gateway.
Allen B. Alexander, Savage’s CEO and chairman in Salt Lake City, said: “We are pleased to grow and broaden our relationship with KCS, and excited to expand our services to provide a destination crude-by-rail terminal on the US Gulf Coast. All of us at Savage are committed to serving this important industry by designing and operating critical touchpoints of the crude oil supply chain.”
As for KCS: “We believe the Port Arthur refinery complex and the readily accessible storage and distribution infrastructure in the area make this site an attractive destination for North American crude production. Savage is a natural partner for us given our existing arrangement at the Pabtex facility and Savage’sexpertise and commitment to the refining industry,” said David L. Starling, KCS president and chief executive officer.
Savage, a North American leader in providing services to electric power generation, coal mining, oil refining, chemical and Class I railroad customers, owns and/or operates large terminals for coal, petroleum coke, sulphur, chemicals and other commodities; system-based transportation – truck, rail, barge and vessel – moving over 50 million tons annually of coal, coke, waste coal, waste ash and sulphur; and also provides on-site operations and management services for large power plants and oil refiners. Savage has 145 operations in 36 US states and five Canadian provinces. Savage will operate PACT within its Railway and Industry Solutions Group, which also includes its announced Trenton (North Dakota) Railport, as well as 11 other specialty rail transloading terminals throughout the US. Savage is an Innovative Supply Chain Solutionscompany, dedicated to creating value for each customer with specially tailored services. For more information, visit www.savageservices.com.
Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS’ North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada. For more information, visit www.kcsouthern.com.