USD Partners and US Development Group Issue Operational Update and Launch of New Website
December 15 2021 - 5:06PM
Business Wire
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.
____________
(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
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version on businesswire.com: https://www.businesswire.com/news/home/20211215006062/en/
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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