Houston’s USD Partners LP announced this week that it has entered into a three month rail-to-truck Terminalling Services Agreement with a new, third party customer at the Partnership’s Stroud, Oklahoma terminal .
The short-term agreement includes take-or-pay provisions with a minimum volume commitment. The customer is entering into the agreement as a trial period to test the Stroud Terminal as a destination for its waxy crude oil production out of the Uinta Basin. If the testing period is successful, it is expected that a longer-term TSA could be executed with the customer.
“As previously discussed during our first quarter 2023 earnings call, we are excited about this new business opportunity and the re-purposing of our Stroud Terminal to handle waxy crude from the Uinta Basin,” said Brad Sanders, USD Group’s Chief Commercial Officer.
“The Uinta Basin’s significant growth trajectory is constrained by its lack of access to rail logistics destinations, and our Stroud Terminal is uniquely positioned to provide direct access to meaningful market optionality that exists at the Cushing crude oil hub.”
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, refiners and marketers. 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, 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.
USD, which owns the general partner of USD Partners LP, is engaged in designing, developing, owning, and managing large-scale multi-modal logistics centers and energy-related infrastructure across North America. USD’s 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.
Source: USD release