USD Announces Execution of Five-year Terminalling Services Agreement with New Refiner Customer at Hardisty
Public Company Information:
HOUSTON--(BUSINESS WIRE)--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.