USD Partners announced generated net cash provided by operating activities amounted to $12.6m and adjusted EBITDA $14.5m for the three months ended September 30, 2018. The company reported a net income of $5.9m.

Dan Borgen, the Partnership’s Chief Executive Officer, said: “We are also pleased to announce continued support in the form of another material contract extension at our Hardisty terminal. With $40 to $50 differentials between a Western Canadian Select and a West Texas Intermediate barrel of crude oil existing today, and forward curves indicating a continued imbalance between supply and takeaway capacity in Western Canada, we remain excited about our strategically located network of assets and we look forward to communicating more positive news in the future.”

USD Partners also announced that it has entered into a four-year extension with a Canadian-based, oil infrastructure focused company at its Hardisty terminal. The customer has significantly increased its position by more than doubling its contracted capacity at the terminal. The extension contains consistent take-or-pay terms with average minimum monthly payments and rates that exceed those of the original terminalling services agreement (TSA) with this customer.

On September 26, 2018, the Partnership announced that it had entered into a four-year extension with Cenovus Energy Inc., significantly increasing its previous position from seven percent to 25 percent of the Hardisty terminal’s capacity. The extension contains consistent take-or-pay terms with average minimum monthly payments and rates that exceed those of the original TSA with this customer.

To date, the partnership has renewed and extended approximately 65 percent of the capacity at its Hardisty terminal through mid-2022, with approximately 42 percent extended through mid-2023. These contract renewals are estimated to replace approximately 80 percent of the Hardisty terminal’s current cash flows, on an annualised basis, over the next three years starting in July 2019.

Additionally, USD Group confirmed, pursuant to its development rights at the Hardisty terminal, that it is moving forward with the Hardisty South expansion (Hardisty South). The existing Hardisty terminal, which is owned by the Partnership, has designed capacity for two unit trains per day, or approximately 150,000 barrels per day. Hardisty South, which is owned by USDG, will add one unit train per day, or approximately 75,000 barrels per day, of takeaway capacity to the terminal by modifying the existing loading rack and building additional infrastructure and trackage. The project is expected to be in-service by January 1, 2019. 

To date, approximately 67 percent of Hardisty South’s capacity has been commercialised through take-or-pay agreements with minimum volume commitments, which are expected to generate an average of approximately $11.1m of cash flow over the next four years for USDG.

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12th November 2018

12th November 2018