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USD Partners LP Announces Customer Contract Renewal at Hardisty Terminal
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Rhea-AI Summary
USD Partners LP (USDP) extends contract with refiner customer at Hardisty Terminal, with potential for increased demand for terminalling services in Western Canada.
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HOUSTON--(BUSINESS WIRE)--
USD Partners LP (OTC: USDP) (the “Partnership”) announced today that it has entered into a one-year extension agreement with an existing refiner customer at its Hardisty Terminal for a contract that was set to expire in January 2024. The current agreement with the customer contains a commitment for 15% of the Hardisty Terminal’s capacity. The one-year extension with the customer contracts 7% of the Hardisty Terminal’s capacity through the end of January 2025, with an option to utilize up to an incremental 4% of the terminal’s capacity on a monthly basis. The renewal contains take-or-pay terms with minimum monthly payments and a slightly higher average rate than the original terminalling services agreement.
“We are pleased to announce that we have executed an early extension with our long-term refiner customer at the Hardisty Terminal,” said Jim Albertson, USD’s Senior Vice President Energy Infrastructure and Chief Commercial Officer - Canada. “With inventory levels and pipeline egress apportionment levels in Western Canada trending higher, the demand for crude by rail solutions should potentially continue to increase, which could lead to higher demand for terminalling services at the Partnership’s Hardisty Terminal. We look forward to keeping the market updated regarding our commercial discussions and potential new contracts for terminalling services at the Partnership’s Hardisty Terminal,” added Jim.
About USD Partners LP
USD Partners LP is a fee-based, growth-oriented master limited partnership formed in 2014 by US Development Group, LLC (“USD”) 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, refiners and marketers. 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, 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.
USD, which owns the general partner of USD Partners LP, is engaged in designing, developing, owning, and managing large-scale multi-modal logistics centers and energy-related infrastructure across North America. USD’s 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 capacity for substantial tank storage, 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. Information on websites referenced in this release is not part of this release.
This press release contains forward-looking statements within the meaning of U.S. federal securities laws, including statements related to inventory levels and pipeline egress apportionment levels, statement related to demand for crude by rail solutions, including demand for terminalling services at the Partnership’s Hardisty Terminal, and statements regarding announcements of potential new terminalling services contracts at the Partnership’s Hardisty Terminal. Words and phrases such as “expect,” “plan,” “intent,” “believes,” “projects,” “begin,” “anticipates,” “subject to” 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 the Partnership are based on management’s expectations, estimates and projections about the Partnership, its interests 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 the Partnership’s ability to enter into new contracts for uncontracted capacity and to renew expiring contracts and changes in general economic conditions and commodity prices, as well as those factors set forth under the heading “Risk Factors” and elsewhere 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 (many of which may be amplified by the COVID-19 pandemic and the recent significant reductions in demand for and prices of crude oil, natural gas and natural gas liquids). The Partnership is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Jennifer Waller
Sr. Director, Financial Reporting and Investor Relations
(832) 991-8383
jwaller@usdg.com
Source: USD Partners LP
FAQ
What is the extension agreement about at Hardisty Terminal?
The extension agreement involves a one-year extension with an existing refiner customer at the Hardisty Terminal for a contract that was set to expire in January 2024.
What is the current commitment at the Hardisty Terminal?
The current agreement with the customer contains a commitment for 15% of the Hardisty Terminal’s capacity.
What does the one-year extension entail?
The one-year extension with the customer contracts 7% of the Hardisty Terminal’s capacity through the end of January 2025, with an option to utilize up to an incremental 4% of the terminal’s capacity on a monthly basis.
What are the terms of the renewal?
The renewal contains take-or-pay terms with minimum monthly payments and a slightly higher average rate than the original terminalling services agreement.
What is the potential impact of the extension on demand for terminalling services?
With inventory levels and pipeline egress apportionment levels in Western Canada trending higher, the demand for crude by rail solutions should potentially continue to increase, leading to higher demand for terminalling services at the Partnership’s Hardisty Terminal.
