Canadian infrastructure and logistics business Provident Energy has made a long-term storage agreement at its Redwater Facility, for more than 2.5 million barrels of capacity.
The ten year crude oil storage agreement with an unnamed producer will include storage in Provident’s underground storage caverns on a fee-for-service basis. Provident will also convert an existing product cavern and re-configure one of five caverns currently under development on the site so that they can store crude oil.
Doug Haughey, Provident’s CEO, says: ‘This strong demand also allowed us to materially increase our 2011 adjusted EBITDA guidance and medium-term growth capital outlook.’
The adjusted EBITDA has increased from between $210 million (€152 million) to between $245 million and $285 million.
The company says it also expect its increase in pricing to be influenced by the propane percentage for crude for the second half of 2011 experiencing a rise in sales.
Over the next two years, Provident plans to deploy about $280 million in growth capital, $135 million and $145 million in 2012 and 2013, respectively. This represents a material increase over the $70 million per year guidance that had been previously suggested.