USD Partners Announces Five Year Ethanol Customer Renewal at its West Colton Terminal; Commencement of Renewable Diesel Operations
January 18 2022 - 04:50PM
Business Wire
USD Partners LP (NYSE:USDP) (the “Partnership”) announced it has
entered into a five-year Terminal Services Agreement with a minimum
monthly throughput commitment with a major ethanol producer at its
West Colton, CA terminal, effective January 1, 2022. This contract
replaces an existing short-term contract at the terminal and is
expected to add incremental Net Cash from Operating Activities and
Adjusted EBITDA of approximately $1.0 million to $1.5 million per
year, subject to changes in expected throughput.
Additionally, the Partnership has commenced renewable diesel
operations at its West Colton Terminal and the previously announced
five-year Terminal Services Agreement with USD Clean Fuels LLC
(“USDCF”) became effective December 1, 2021. As previously stated,
this agreement is supported by a minimum throughput commitment to
USDCF from an investment-grade rated, refining customer as well as
a performance guaranty from US Development Group, LLC, the
Partnership’s sponsor.
“We are excited to announce this renewed long-term partnership
at our West Colton Terminal. We believe the extended contract term,
combined with the expansion and long-term commitment in renewable
diesel handling, speaks to our strategically advantaged portfolio
of assets,” said Brad Sanders, Executive Vice President and Chief
Commercial Officer for USD. “We are committed to the transition
into sustainable fuels and see our USD Clean Fuels business as a
strong growth platform for USD and potentially, the Partnership. We
look forward to future announcements of continued growth within
clean fuels.”
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.
Adjusted EBITDA
The Partnership defines Adjusted EBITDA as Net Cash Provided by
Operating Activities adjusted for changes in working capital items,
interest, income taxes, foreign currency transaction gains and
losses, and other items which do not affect the underlying cash
flows produced by the Partnership’s businesses. Adjusted EBITDA is
a non-GAAP, supplemental financial measure used by management and
external users of the Partnership’s financial statements, such as
investors and commercial banks, to assess:
- the Partnership’s liquidity and the ability of the
Partnership’s businesses to produce sufficient cash flows to make
distributions to the Partnership’s unitholders; and
- the Partnership’s ability to incur and service debt and fund
capital expenditures.
The Partnership believes that the presentation of Adjusted
EBITDA in this press release provides information that enhances an
investor's understanding of the Partnership’s ability to generate
cash for payment of distributions and other purposes. The GAAP
measure most directly comparable to Adjusted EBITDA is Net Cash
Provided by Operating Activities. Adjusted EBITDA should not be
considered an alternative to Net Cash Provided by Operating
Activities or any other measure of liquidity presented in
accordance with GAAP. Adjusted EBITDA exclude some, but not all,
items that affect Net Cash Provided by Operating Activities and
this measure may vary among other companies. Due to the uncertainty
and inherent difficulty of predicting the occurrence and future
impact of certain items, which could be significant, the
Partnership is unable to provide a quantitative reconciliation of
the estimated Adjusted EBITDA contribution from the agreement to
Net Cash Provided by Operating Activities.
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 Net Cash from Operating Activities and Adjusted
EBITDA impact of the agreement and the ability of the Partnership
and USD to achieve growth in its clean fuels business. 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.
Category: Operations
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version on businesswire.com: https://www.businesswire.com/news/home/20220118006203/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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