America based USD Partners LP recently declared it has executed long-term renewals for Hardisty Terminal’s remaining capacity with ConocoPhillips Canada. USD Partners. Or the Partnership, has also carried out multi-year extensions for 100% of Hardisty Terminal’s capacity.
Moreover, USD Partners LP and Gibson Energy Inc. have evidently signed a joint venture agreement to build a DRU (diluent recovery unit) adjoining its Hardisty Terminal. Sources close to the matter stated that the material amount of the existing capacity of Hardisty Terminal will be increased by 2030 after the DRU’s construction is completed.
For the record, USD Partners LP was established in 2014 by US Development Group, LLC to purchase, build and operate midstream infrastructure and undertake logistics solutions for biofuels and crude oil. The Partnership generates revenue through operating cashflows from take-or-pay multi-year contracts with its customers which include prominent oil companies and refiners.
According to reliable sources, the company expects to place the DRU at Hardisty Terminal up to 2021. The renewals include consistent rates like that of the original terminalling services and take-or-pay terms with low monthly payments.
Notably, ConocoPhillips Canada has also signed contracts which include renewals and expansion of 100% of the Partnership’s destination capacity at the Stroud Terminal. This venture will apparently commence from January and June 2020.
Dan Borgen, CEO of the Partnership mentioned in a statement that the group will successfully convert heavy crude oil from Western Canada to DRUbit™. He added that the Partnership primarily focuses on working to create sustainable solutions for shipping crude oil to the U.S. with their respective transportation partners and customers.
USD Partners’ proprietary DRU technology splits the raw bitumen diluent which is used in production processes and returns the recovered diluent to be reused in Alberta market. The technology also creates DRUbit™ which is a more concentrated crude oil and is specifically designed for rail transportation.
When transported by rail, experts claim that DRUbit™ not only provides environmental benefits but also enhanced safety during operation. Furthermore, DRUbit™ also improves economics for all parties and offers enhanced take-away capacity.