They are evacuating buildings within a 300-yard area of the railyard and shutting down Highway 1 from Garden Street to Ashburn Lake Road, both eastbound and westbound.
Fire Chief Kevin Clifford said the rail car is no longer leaking, but vapours remain a concern.
The colourless, odourless gas is extremely flammable.
At least eight people from Irving Oil's hazardous materials team are on scene, along with NB Southern Railway officials.
More to come