US Development Group, LLC (through a wholly-owned affiliate, collectively USD) and USD Partners LP (NYSE:USDP) (the “Partnership”) announced the diluent recovery unit (DRU) has been declared fully operational and the shipment of DRUbit™ by Rail™ (DBR™) has commenced.

The DRU is located at the Hardisty Energy Terminal (HET) near Hardisty, Alberta and is a 50%/50% joint venture between USD and Gibson Energy Inc. (Gibson). HET is located adjacent to USD Partners’ existing Hardisty Rail Terminal, which is the origination terminal for transloading the DRUbit™ onto railcars for shipment. The current destination terminal for the DRUbit™ is the USD-owned and operated Port Arthur Terminal in Port Arthur, Texas (PAT). This DBR network is highly scalable and is well-positioned for future commercial expansions. USD and Gibson continue to pursue commercial discussions with current and potential producer and refiner customers to secure additional long-term agreements to support future expansions at both the DRU and the PAT.

In association with the initial commencement of operations at the DRU in August 2021, approximately 32% of the Hardisty Terminal’s capacity was extended beyond 2030 pursuant to long-term, multi-year renewals at the Hardisty Terminal executed with a subsidiary of ConocoPhillips.

USD’s patented DRU technology separates the diluent that has been added to the raw bitumen in the production process, which meets two important market needs. It creates DRUbit™, a proprietary heavy Canadian crude oil or bitumen that ships by rail and does not meet any of the defined categories of hazardous materials by U.S. DOT Hazardous Materials regulations and Canada’s Transport of Dangerous Goods regulations, creating safety and environmental benefits. Additionally, it returns the recovered diluent to ConocoPhillips at HET for reuse in the Western Canadian market, which reduces delivered costs for diluent. The DBR network provides meaningful safety, economic and environmental benefits relative to conventional crude by rail.

The DRU at HET is operating at or above its nameplate capacity of 50,000 barrels per day of inlet bitumen blend, which the DRU separates into DRUbit™ and diluent. Transporting DRUbit™ by Rail™ is projected to reduce carbon emissions nearly 20% relative to dilbit by rail alternatives and approximately 30% compared to dilbit by pipeline alternatives.(1)

Updated USD Partners and USD Website

In addition, USD and the Partnership announced today that their associated websites (www.usdg.com and www.usdpartners.com) have been updated with information regarding the DRU and PAT projects.

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 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.

About USD

USD and its affiliates, which own the general partner of USD Partners LP, 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 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 www.usdg.com. DRUbit™, DBR™ and DRUbit™ by Rail™ are trademarks of DRU Assets LLC, a subsidiary of USD, and are used by permission. All rights reserved. Information on websites referenced in this release is not part of this release.

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 ability of the Partnership and USD to achieve contract extensions and commitments, new customer agreements and expansions; the ability of the Partnership and USD to develop existing and future additional projects and expansion opportunities and whether those projects and opportunities developed by USD would be made available for acquisition, or acquired, by the Partnership; the impact of the West Colton Renewable Diesel project; the impact of the completion of USD’s DRU project; volumes at, and demand for, the Partnership’s terminals; the amount and timing of future distribution payments and distribution growth; and statements about actions by third parties. Words and phrases such as “expect,” “progressing on,” “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, USD’s projects 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 impact of the novel coronavirus (COVID-19) pandemic and related economic impact 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 significant volatility in demand for, and fluctuations in the 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.

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(1)

Results of comparative carbon emissions model developed jointly by USDG and Gibson Energy and verified by Dr. Damien Hocking, PhD (of Corelium): Third-Party Review of Gibson/USD Group Operational Value Chain Carbon Emissions Model. Dr. Damien Hocking, Corelium Software (August 18, 2021) (report available upon request).

Category: Operations

Adam Altsuler Executive Vice President, Chief Financial Officer (281) 291-3995 aaltsuler@usdg.com

Jennifer Waller Director, Financial Reporting & Investor Relations (832) 991-8383 jwaller@usdg.com

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