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USD Partners affirms terminals to remain fully operational

Published by , Editorial Assistant
Hydrocarbon Engineering,

USD Partners LP (USDP) has announced that it has taken measures in response to the novel coronavirus/COVID-19 outbreak, and that all of its terminals remain and are expected to remain fully operational.

Measures being taken by the Partnership and its service providers include full sanitising of all surfaces multiple times daily, split crew changes, practicing social distancing wherever practical, and full lock-down of facilities except for approved contractors and services providers.

The Partnership reaffirmed that substantially all of its cash flows are generated from multi-year, take-or-pay terminalling services agreements related to its crude oil terminals, which include minimum monthly commitment fees. The Partnership’s customers include major integrated oil companies, refiners and marketers, the majority of which are investment-grade rated.

The Partnership’s Hardisty and Stroud terminals are currently contracted at 100% of their capacities under multi-year take-or-pay terminalling services agreements with mainly investment-grade rated customers. The Casper terminal’s capacity is currently partially contracted under multi-year agreements with an investment-grade multinational customer and a producer customer that provide for take-or-pay terms for terminalling and storage services and variable fees associated with actual throughput volumes and other services.

For the year ended 31 December 2019, the Hardisty and Stroud terminals contributed approximately 67% and 22% of the Partnership’s terminalling services segment adjusted EBITDA, respectively, while the Casper terminal contributed approximately 9% of the Partnership’s terminalling services segment adjusted EBITDA. Segment adjusted EBITDA is a measure calculated in accordance with generally accepted accounting principles (GAAP).

“This is a difficult time for our industry,” remarked Dan Borgen, CEO and President. “Our core business is sound and our customer profile is strong. We continue to be bullish on our ability to renew and extend our contracts at the Partnership’s Hardisty terminal, particularly in connection with potential growth opportunities at our Sponsor’s Diluent Recovery Unit (DRU) joint venture project, and our ability to identify and secure future opportunities at the Cushing hub via the Partnership’s Stroud Terminal. In addition, we continue to monitor the challenges relating to the Casper Terminal’s cash flow and work with existing and potential new customers to expand our business opportunities at the terminal, including opportunities that may result from Enbridge Inc.’s planned 50 000 bpd expansion of its Express Pipeline through the use of drag reducing agent and pump stations.”

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