Kansas City Southern expects a new joint-venture oil rail terminal in Port Arthur, Texas, to start up in late 2016 or early 2017, a company executive told analysts.

The timeline reflects “permitting and construction uncertainties,” Patrick Ottensmeyer, executive vice president of sales and marketing, said during an earnings call. Oil products distributor Global Partners will build the terminal, which he said will be able to handle two 120-car trains per day of Canadian heavy crude oil, or about 160,000 barrels per day (bpd). Three major refineries capable of processing Canadian crude operate in Port Arthur.

In the meantime, Ottensmeyer said, the railroad expects Canadian crude shipments to other US Gulf Coast destinations in the Port Arthur/Nederland and Beaumont, Texas, and Baton Rouge, Louisiana, in late 2014 and next year.

The railroad can deliver crude to Sunoco Logistics Partners’ storage terminal in Nederland, Genesis Energy LP’s terminal in Maryland, Louisiana, near ExxonMobil Corp’s 502,500 barrels-per-day (bpd) Baton Rouge refinery, and at Jefferson Refinery’s terminal at the Port of Beaumont, near Exxon’s 344,600 bpd Beaumont refinery.

“I think it’s going to be a bit of a slow ramp-up, you could start seeing some things move in the fourth quarter of this year and then into 2015 and just ramp up over the course of next year,” Ottensmeyer said.

The railroad expects Canadian crude to drive its oil-by-rail growth, executives said. Kansas City Southern’s shipments of light North Dakota Bakken crude to the Gulf Coast have declined sharply – down 37 per cent compared to a year ago – as pipeline startups have brought more light crudes to the region from Texas and the Cushing, Oklahoma US crude futures hub.

Crude oil currently makes up less than 5 per cent of Kansas City Southern’s total revenue among the commodities it moves, executives said.