Tankers line up to be emptied on a new rail line at Pan Western Corp. in North Las Vegas on Friday. The new line, expected to be completed by mid-September, will bring in up to 12 rail cars of diesel per day. Photos by Isaac Brekken/Review-Journal Mountain States Contracting construction worker Jasper Pete works on a new rail line at Pan Western Corp. in North Las Vegas on Friday. Mountain States Contracting construction worker Jasper Pete works on a new rail line that will bring in up to 12 rail cars of diesel per day.

A North Las Vegas business has nearly completed a $2.5 million project that should soon help ease Southern Nevada's impending fuel crunch.

Pan Western Corp. is expanding its existing rail yard on Donovan Way north of Craig Road.

Once work there is completed, the company will step up its imports of Gulf Coast fuel for use in the Las Vegas Valley and nearby areas.

The existing rail yard features 12,000 feet of track on 23 acres, Pan Western President Moe Truman said Friday during a tour.

Using 34 acres of adjacent leased property, the company is building a 30,000-foot rail loop to better accommodate the 60- to 80-car "unit trains" favored by the railroad industry.

The loop will allow lengthy unit trains to move off of Union Pacific's main line while cars are unloaded, thereby reducing delays for other trains passing through the valley.

Plans for Pan Western's enlarged yard followed talks with representatives of the city of North Las Vegas.

"Mayor (Michael) Montandon suggested that a (fuel) shortage was looming," Truman said. "We did some studies, and it was pretty obvious that the fuel pipelines were constrained."

Mountain States Contracting, a Glendale, Ariz.-based construction company that specializes in rail projects, is handling the job.

A pair of 12-man teams has been at work placing rail lines since mid-July. Work is expected to wrap by mid-September.

An adjacent depot for shifting fuel from trains to local delivery trucks will open in approximately 10 weeks, allowing Pan Western to off-load 10 rail cars per day, each carrying 28,000 gallons of diesel fuel.

The company now off-loads four such cars a week.

Almost all of the Las Vegas Valley's gasoline, diesel and jet fuel is now shipped from refineries in Southern California by way of two parallel pipelines operated by Houston-based Kinder Morgan Energy Partners.

Both are nearing their combined capacities of approximately 140,000 barrels per day, though Kinder Morgan has committed to upgrades that will boost their daily limits to 156,000 barrels.

Beyond that, new delivery methods must be established.

Clark County last year formed a special fuel commission, whose members include civic and business leaders, to discuss alternative methods.

In April, Pan Western told the commission that five dedicated fuel trains per week would supply 200,000 more barrels of fuel every seven days.

Truman said Friday it would take at least a year to reach such an operational level, however.

One barrel of fuel equates to approximately 42 gallons.

The commission will present its final recommendations to the county in November, but recent discussions suggest it will call for one or more new pipelines from areas outside California.

Those sources -- provided any private-sector businesses agree to build them -- would be supplemented by rail and truck deliveries.

So far four companies, including Kinder Morgan, have publicly expressed interest in building new pipelines to Southern Nevada. Each proposal has its pros and cons, fuel commission members have said.

Truman believes the valley's best solution involves the elimination of diesel fuel from Kinder Morgan's pipelines, thereby freeing space for more motor vehicle and jet fuel.

"It's a brilliant way to segregate," Truman said.

Still, he admits such a step -- which would greatly benefit his company -- would likely require new government regulations that could be opposed by others with a stake in the fuel industry.

One Kinder Morgan pipeline runs within 200 feet of Pan Western's site. Truman hopes to someday install a connector that would allow rail-based fuel to feed the pipeline, as well. However, he has no agreement for such a connector.

Regardless of what happens, Pan Western's expanded yard opens the door to more fuel from the Gulf Coast or any other refineries served by rail. It also allows for delivery of more rail-based ethanol or biodiesel, should consumer demand for those products increase locally.

Pan Western, a family-owned business, has operated locally since 1970. Cargo off-loaded at its existing rail yard also includes loads of cement and rebar used for local construction work.

The expanded yard's benefits aren't limited to increased fuel supplies. The existing yard can handle about 200,000 tons of off-loaded rebar each year. But one local client -- which Truman declined to identify -- will require 167,000 additional tons of rebar annually to complete a forthcoming hotel-casino.

With its expanded yard, Pan Western will be able to handle that added inventory, Truman said.