USD Announces Execution of Five-year Terminalling Services Agreement with New Refiner Customer at Hardisty
USD Group LLC (“USD”) and USD Partners LP (NYSE: USDP) (the
“Partnership”) announced that USD has executed a five-year, take-or-pay
terminalling services agreement with a high quality refiner customer.
The agreement is for trans-loading capacity at the Hardisty rail
terminal with an expected start date in late 2018.
“We are pleased to announce the execution of a five-year, take-or-pay
contract with a new refiner customer at Hardisty to meet their near term
need for capacity,” said Dan Borgen, USD’s Chief Executive Officer. “As
we mentioned on the Partnership’s most recent earnings call, customer
activity at the Hardisty origination terminal has ramped significantly
over the past several months and current market demand remains strong,
exceeding the available capacity at the terminal today. This new
agreement could support the construction of additional capacity at the
Hardisty terminal pursuant to USD’s existing development rights, or be
serviced out of the Partnership’s existing facility, to the extent
excess capacity becomes available.”
USD is also in discussions with a number of current customers of the
Partnership’s Hardisty terminal for early renewals or extensions of
their agreements. “Our existing customers’ interest in negotiating
extended, long-term commitments at Hardisty well in advance of their
existing contract expirations strongly validates our strategic
commercial vision, and we are working hard to reach mutually agreeable
terms to extend these agreements,” stated Jim Albertson, USD’s Senior
Vice President, Canadian Business Unit. “We look forward to updating the
market with our progress in the near future.”
About USD Group LLC
USD and its affiliates are engaged in designing, developing, owning and
managing large-scale multi-modal logistics centers and energy-related
infrastructure across North America. USD solutions create flexible
market access for customers in significant growth areas and key demand
centers, including Western Canada, the U.S. Gulf Coast and Mexico. Among
other projects, USD is currently pursuing the development of a premier
energy logistics terminal on the Houston Ship Channel with substantial
tank storage capacity, multiple docks (including barge and deepwater),
inbound and outbound pipeline connectivity, as well as a rail terminal
with unit train capabilities. For additional information, please visit texasdeepwater.com.
About USD Partners LP
USD Partners LP is a fee-based, growth-oriented master limited
partnership formed in 2014 by US Development Group, LLC to acquire,
develop and operate midstream infrastructure and complementary logistics
solutions for crude oil, biofuels and other energy-related products. The
Partnership generates substantially all of its operating cash flows from
multi-year, take-or-pay contracts with primarily investment grade
customers, including major integrated oil companies and refiners. The
Partnership’s principal assets include a network of crude oil terminals
that facilitate the transportation of heavy crude oil from Western
Canada to key demand centers across North America. The Partnership’s
operations include railcar loading and unloading, storage and blending
in on-site tanks, inbound and outbound pipeline connectivity, truck
transloading, as well as other related logistics services. In addition,
the Partnership provides customers with leased railcars and fleet
services to facilitate the transportation of liquid hydrocarbons and
biofuels by rail.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of U.S. federal securities laws, including statements with
respect to the commencement of the new terminalling services contract,
the possible construction of additional capacity at the Hardisty
terminal, the status and outcome of negotiations with existing and new
customers, demand for terminalling capacity at the Hardisty terminal,
and the amount of available capacity at the Hardisty terminal and USD’s
ability to gain access to this capacity. Words and phrases such as “is
expected,” “is planned,” “believes,” “projects,” and similar expressions
are used to identify such forward-looking statements. However, the
absence of these words does not mean that a statement is not
forward-looking. Forward-looking statements relating to USD or the
Partnership are based on management’s expectations, estimates and
projections about USD, the Partnership and the energy industry in
general on the date this press release was issued. These statements are
not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expressed
or forecast in such forward-looking statements. Factors that could cause
actual results or events to differ materially from those described in
the forward-looking statements include construction and cost-related
risks; risks associated with constructing and operating a terminals;
changes in general economic conditions; the effects of competition, in
particular, by pipelines and other terminalling facilities; the supply
of, and demand for, rail terminalling services for crude oil, refined
products and biofuels; hazards and operating risks that may not be
covered fully by insurance; disruptions due to equipment interruption or
failure at the Hardisty terminal or third-party facilities on which our
business is dependent; natural disasters, weather-related delays,
casualty losses and other matters beyond our control; and changes in
laws or regulations to which we are subject, including compliance with
environmental and operational safety regulations, that may increase our
costs. Additional factors that could cause actual results or events to
differ materially from those described in the forward-looking statements
are included under the heading “Risk Factors” in the Partnership’s most
recent Annual Report on Form 10-K and in the Partnership’s subsequent
filings with the Securities and Exchange Commission. Neither USD nor the
Partnership is under any obligation (and each expressly disclaims any
such obligation) to update or alter the forward-looking statements set
forth in this press release, whether as a result of new information,
future events or otherwise.
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