USD Partners LP (NYSE:USDP) (the Partnership) announced today that it has entered into a four year extension with Cenovus Energy Inc., significantly increasing its previous position from 7% to 25% of the Hardisty terminals capacity. The renewal contains consistent take-or-pay terms with minimum monthly payments and rates that exceed those of the original terminalling services agreement with the customer.
We are pleased to announce another early extension with one of our long-term customers at our Hardisty terminal, said Jim Albertson, USDs Senior Vice President, Canadian Business Unit. This contract extension, along with the first extension we announced earlier this year, represents a meaningful increase in our contracted capacity at the Hardisty rail terminal and is confirmation of the significant demand that exists for takeaway capacity out of Western Canada. We continue to work with the balance of our customers as well as new customers on contracting the remaining available capacity.
About USD Partners LP
USD Partners LP is a fee-based, growth-oriented master limited partnership formed in 2014 by US Development Group, LLC to acquire, develop and operate midstream infrastructure and complementary logistics solutions for crude oil, biofuels and other energy-related products. The Partnership generates substantially all of its operating cash flows from multi-year, take-or-pay contracts with primarily investment grade customers, including major integrated oil companies and refiners. The Partnerships principal assets include a network of crude oil terminals that facilitate the transportation of heavy crude oil from Western Canada to key demand centers across North America. The Partnerships operations include railcar loading and unloading, storage and blending in on-site tanks, inbound and outbound pipeline connectivity, truck transloading, as well as other related logistics services. In addition, the Partnership provides customers with leased railcars and fleet services to facilitate the transportation of liquid hydrocarbons and biofuels by rail.
Cautionary Note Regarding Forward-Looking Statements
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This press release contains forward-looking statements within the meaning of U.S. federal securities laws, including statements with respect to the status and outcome of negotiations with existing and new customers, demand for terminalling capacity at the Hardisty terminal, and the amount of available capacity at the Hardisty terminal. Words and phrases such as is expected, is planned, believes, projects, and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to USD or the Partnership are based on managements expectations, estimates and projections about USD, the Partnership and the energy industry in general on the date this press release was issued. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include construction and cost-related risks; risks associated with constructing and operating terminals; changes in general economic conditions; the effects of competition, in particular, by pipelines and other terminalling facilities; the supply of, and demand for, rail terminalling services for crude oil, refined products and biofuels; hazards and operating risks that may not be covered fully by insurance; disruptions due to equipment interruption or failure at the Hardisty terminal or third-party facilities on which our business is dependent; natural disasters, weather-related delays, casualty losses and other matters beyond our control; and changes in laws or regulations to which we are subject, including compliance with environmental and operational safety regulations, that may increase our costs. Additional factors that could cause actual results or events to differ materially from those described in the forward-looking statements are included under the heading Risk Factors in the Partnerships most recent Annual Report on Form 10-K and in the Partnerships subsequent filings with the Securities and Exchange Commission. Neither USD nor the Partnership is under any obligation (and each expressly disclaims any such obligation) to update or alter the forward-looking statements set forth in this press release, whether as a result of new information, future events or otherwise.