BMW's planned $1 billion Upstate expansion has triggered a rail upgrade at the Port of Charleston terminal that the German carmaker uses to export its luxury automobiles.

Palmetto Railways, part of the S.C. Department of Commerce, recently completed a $3.2 million project that expands its switching operations at the State Ports Authority's Columbus Street Terminal on the peninsula.

BMW exports about 70 percent of its Upstate-made vehicles through Columbus Street to more than 100 overseas destinations. Its latest expansion is expected to boost overseas shipments from Charleston by about 40 percent.

Palmetto Railways, a short-haul line that's part of the S.C. Commerce Department, recently added about 4,300 feet of track at the terminal, giving it a total of 14,616 feet of track capacity, said Jeff McWhorter, president and chief executive officer.

The expansion will allow Palmetto Railways to handle a larger number of rail cars at one time, McWhorter said.

The agency handles the switching operations for 80 to 100 BMW rail cars in a typical week, McWhorter said.

"The additional capacity will allow us to handle the anticipated increase in volumes for BMW and provide us with the ability to more efficiently (handle) the BMW trains," McWhorter said.

The rail improvements also included a new bridge over a creek at the north end of the terminal, he added.

In March, BMW announced it would invest $1 billion to expand its Spartanburg County campus and add production of the new X7 sport utility vehicle by the end of 2016.

The Greer factory already makes the X3, X4, X5 and X6 SUVs. The larger X7 will accommodate up to seven passengers in three rows of seating. It will be the biggest SUV that BMW has ever made.

Officials have said the expansion is expected to increase BMW's annual production to about 450,000 vehicles from roughly 300,000 now. That would make the Greer factory the busiest factory within BMW.

Jim Newsome, president and CEO of the SPA, said the agency's Columbus Street operation was about three years away and is already prepared to handle the 90,000 additional vehicles that will be transported to Charleston for export once BMW begins making the X7 models.

Reach Tyrone Richardson at 937-5550 and follow him on Twitter @tyrichardsonPC.