USD Partners is considering a potential expansion of its Hardisty terminal to meet near-term demand from customers.
In its first quarter 2018 financial result, USD said that customer activity at its Hardisty origination terminal has substantially ramped up and that current market demand exceeds the available capacity at the terminal.
CEO Dan Borgen says: 'Given the current market dynamics and the increased support from the Canadian railroads, we and our general partner are actively negotiating with current and new potential customers to extend the terms of our existing take-or-pay agreements as well as evaluating a potential expansion to meet near-term demand.
'The recent success we had filing the remaining capacity at our Stroud terminal with crude originated at our Hardisty terminal simply validates the significant value our network can provide.'
The company's Hardisty and Casper terminals are well-positioned at strategic locations to meet growing takeaway needs as Western Canadian crude oil supplies continue to exceed available pipeline takeaway capacity. The company believes its Stroud terminals provides an advantaged rail destination for Western Canadian crude oil given the optionality provided by its connectivity to the Cushing hub as well as multiple refining centres across the US.
In a statement, the company says: 'The partnership expects these advantages, including its recent established origin-to-destination capabilities, to result in long-term contract extensions and expansion opportunities across its terminal network.'
In the second quarter of 2018, the company continues to use tank capacity at the Casper terminal to support spot shipments for several customers, with whom it is negotiating term agreements for potential ongoing use of the terminal.
Additionally, the company is pursuing a hub strategy through existing and potential additional connections to other downstream pipelines in the area.
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