BNSF Railway, which hauls grains and now record volumes of Bakken oil out of North Dakota, may fuel its locomotives with liquid natural gas and is being encouraged to build a gas processing plant and refueling station in the state.

BNSF spokeswoman Amy McBeth said while the railway is exploring the potential for LNG as a locomotive fuel, it is still early in the project.

“While we have not yet made a decision to proceed, we have been working with state and federal elected officials from North Dakota to make this concept viable,” McBeth said.

Gov. Jack Dalrymple said he’s working to convince BNSF that North Dakota is an ideal location because of its natural gas resources and strategic location on the company’s rail service map. The project also would help reduce flaring by creating another gas market.

Dalrymple said BNSF is studying the economics of converting locomotives from diesel and investing in new natural-gas fueled locomotives.