USD Partners acquires crude-oil terminal in Oklahoma

USD Partners LP has acquired a crude-oil terminal in Stroud, Okla., for $25 million, the company announced yesterday.

The terminal will be used for rail-to-pipeline shipments of crude oil from USD Partners' Hardisty terminal in western Canada to the oil hub in Cushing, Okla., according to a company press release.

As part of the acquisition, USD Partners extended the term of take-or-pay terminal services related to 25 percent of the Hardisty terminal's available capacity by one year.

Additionally, USD Partners entered into a new multiyear, take-or-pay terminal services with a multinational energy customer for the use of half of the Stroud terminal's available capacity. The agreement's term starts Oct. 1 and concludes June 30, 2020. The customer was not identified in the press release.

The purchase price of $25 million includes $2.2 million of one-time costs and anticipated growth capital expenditures to retrofit the terminal to handle heavy grades of Canadian crude oil.

"We expect the pairing of the Stroud destination terminal with our advantaged origination terminals will drive additional commercial opportunities, particularly as we approach another cycle where growing crude oil production from Western Canada will exceed available takeaway capacity," said Jim Albertson, USD Partners' vice president, commercial development-Canada.

The Stroud terminal is located on 76 acres and includes 104 rail-car spots. It has the capability of unloading one unit train per day, two 70,000 barrel onsite storage tanks and one truck bay.

Additionally, the terminal includes a 12-inch diameter, 17-mile pipeline connected to the Cushing hub. Inbound product is delivered by the Stillwater Central Railroad, which handles deliveries from BNSF Railway Co. and Union Pacific Railroad.

USD Partners 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.