By Sabrina Valle

July 21 (Reuters) - Berkshire Hathaway-owned BRKa.N BNSF Railway is working with Goldman Sachs to explore the takeover of a rival railroad, two sources familiar with the matter told Reuters on Monday.

A deal would add to a slew of M&A activity in the railway sector, amid rival Union Pacific's UNP.N possible acquisition of Norfolk Southern NSC.N to create a $200 billion coast-to-coast rail network.

A merger between Union Pacific and Norfolk Southern would create the first modern West-to-East single-line freight railroad in the U.S., altering the industry's competitive landscape for peers like BNSF.

BNSF did not immediately respond to a Reuters request for comment.

It was not immediately clear whether BNSF would target Norfolk or the other East Coast carrier, CSX, according to Semafor which first reported the development.

Shares of Norfolk Southern were up 2.4% in extended trading.

(Reporting by Anshuman Tripathy and Arsheeya Bajwa in Bengaluru, and Sabrina Valle in New York; Editing by Anil D'Silva)

((Anshuman.Tripathy@thomsonreuters.com;))