CHS, Energy Partners opening new rail terminal in Montana

When the temperatures drop each winter, Montana propane marketers like Energy Partners often lack adequate supply options amid the vast geography of the state and surrounding region.

For years, the Missoula-based company has relied on long-haul propane trucked from Canada or the supply available at its small rail terminal, which can only accommodate about half of its total volume. And weather can wreak havoc on both sources.

But that’s about to change.

Nearly two years after their initial discussions about a possible solution, Energy Partners and propane supplier CHS Inc. unveiled a new wholesale propane rail terminal in Missoula that will serve the supply needs of the industry. The site features two 90,000-gallon tanks and can accommodate 12 rail cars, totaling another 372,000 gallons of propane storage, with room for expansion.

According to Energy Partners General Manager DeWayne O’Brien, the facility is coming online at the right time, even as his company continues to invest in storage and transportation assets.

“When it’s negative 30 degrees out, every marketer needs product tomorrow,” he emphasizes. “We need 50 loads a week, and we’re only able to get 20 or 25. We needed bigger supply, more supply, and a better way to move that product. If there are problems at the border, in Canada with snow, and they can’t get to us, then we’re even more at a disadvantage. The goal for us is getting to a point where we’re independent, and we have enough supply.”

Energy Partners is co-owned by Missoula Electric Cooperative and CHS Mountain West Cooperative, part of CHS Inc. CHS not only supplies a portion of Energy Partners’ propane volumes, but the two found synergies in working together on the terminal project in supply-challenged western Montana.

“With the growth that Energy Partners has had, they have been tapped out on the ability to bring additional volume through rail into their bulk plant in Missoula,” explains Bryan Wendt, operations and environmental, health and safety leader at CHS. “So, as we researched the region and considered where we might make an investment, Missoula was very attractive – a great customer of ours wanting to partner to grow volumes.”

CHS contracted with Superior Energy Systems to build the $5 million terminal, which is located within an hour of Energy Partners’ seven locations. They broke ground in the spring, celebrated a ribbon-cutting event in October and planned to open the facility in November.

CHS will own the facility, and Energy Partners will serve as the facility manager through the partnership. The terminal will supply propane to marketers throughout Montana and Idaho while also providing the volume Energy Partners needs to fuel its growth.

“Now marketers will have an opportunity to buy open-market fuel right here in their backyard,” O’Brien says. “We’ve never had that as an option before.”

The new terminal offers a host of features, including a pipeline that helps Energy Partners pump 100,000 gallons to its original facility, about 200 yards away, from where it can fuel its bobtails. In addition to the expanded rail infrastructure, storage and 24/7 access, the new terminal will allow transports to load in about 20 minutes.

“The volume we can offload out of the rail cars and the truck volume out of the terminal give us the ability to supply up to 20 million gallons a year” from this location, Wendt says.

For Energy Partners, the terminal represents another avenue to add efficiencies, which O’Brien says is essential as it continues to grow. It already delivers more than 11 million gallons a year to 18,000 customers.

“If we can cut an hour or two out of the day for each of our drivers, that’s just more customers we can get to, especially when the snow flies,” O’Brien says.

The rail terminal marks the eighth for CHS across the Upper Midwest and follows its new terminal in Yuma, Colorado.

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