A crude oil terminal in Oklahoma has been bought by USD Partners to facilitate rail-to-pipeline shipments of crude oil.
The terminal in Stroud, which was bought for $25 million, will enable the shipment of crude from USD’s Hardisty terminal in western Canada to Cushing, Oklahoma.
USD has extended the term of take-or-pay terminalling services agreements related to 25% of the Hardisty terminal’s available capacity by one year.
Along with this transaction, USD has entered into a new multi-year, take-or-pay terminalling services agreement with an investment grade rates, multi-national energy customer for the use of 50% of the Stroud’s terminal’s available capacity.
Dan Borgen, CEO, says: ‘We are proud to announce the successful repositioning of an underutilised asset to create a competitive network solution for our new customer’s growing oil sands production.
‘Our Hardisty to Stroud rail solution delivers immediate takeaway capacity, preserves the integrity of our customer’s heavy barrels and enables substantial end market optionality at Cushing with available pipeline capacity to the Gulf Coast.’
The Stroud terminal is located on 76 acres and includes 104 railcar spots, which can unload one unit train per day, two 70,000 barrel onsite storage tanks and one truck bay.
The terminal also includes a 12-inch diameter, 17-mile pipeline directly connected to the Cushing hub. USD also obtained a lease for 300,000 barrels of crude oil tank storage at the Cushing hub to receive outbound shipments of crude oil from the Stroud terminal.
Jim Albertson, vice president, commercial development – Canada, adds: ‘This transaction reinforces the strategic positioning of our Hardisty asset and confirms our long-held view that rail will continue as an important component of midstream transportation infrastructure in western Canada.